---

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form
10-Q

|                                                          |                                                                                             
|--------------------------------------------------------- | --------------------------------------------------------------------------------------------
|x                                                         | QUARTERLY REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934 
|                                                          |                                                                                             
|For
  the quarterly period ended September 27, 2006      
|                                                          | or                                                                                          
|o                                                         | TRANSITION REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934
|                                                          |                                                                                             
|For
  the transition period from __________ to __________
|                                                         
|Commission
  File No. 333-115644                         

EPL
Intermediate, Inc.(Exact
Name of Registrant as Specified in Its Charter)

|                                                     |  |                    
|---------------------------------------------------- |  | -------------------
|                                                     |  |                    
|Delaware                                             |  | 13-4092105         
|(State or Other Jurisdiction of                      |  | (I.R.S. Employer   
|Incorporation or Organization)                       |  | Identification No.)
|                                                     |  |                    
|3333 Michelson Drive, Suite 550                      |  |                    
|Irvine, California                                   |  | 92612              
|                                                     |  |                    
|(Address of Principal Executive Offices)             |  | (Zip Code)         
|                                                     |  |                    
|(949) 399-2000                                      
|(Registrants Telephone Number, Including Area Code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x  No o

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check
one):

|                          |                       |                           
|------------------------- | --------------------- | --------------------------
|Large Accelerated Filer o | Accelerated
  Filer o | Non-Accelerated
  Filer  x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes  o  No x

As of November 10, 2006, the registrant had 100 shares of its common stock, $.01
par value, outstanding.

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TABLE OF CONTENTS

|     |                                                                                         |     
|---- | --------------------------------------------------------------------------------------- | ----
|Item |                                                                                         | Page
|     |                                                                                         |     
|     |                                                                                         |     
|     | PART I  FINANCIAL INFORMATION                                                          |     
|1.   | Condensed
  Consolidated Financial Statements (Unaudited)                               |     
|2.   | Managements
  Discussion and Analysis of Financial Condition and Results of Operations |     
|3.   | Quantitative
  and Qualitative Disclosures About Market Risk                            |     
|4.   | Controls
  and Procedures                                                               |     
|     |                                                                                         |     
|     | PART II  OTHER INFORMATION                                                             |     
|1.   | Legal
  Proceedings                                                                     |     
|1A.  | Risk
  Factors                                                                          |     
|2.   | Unregistered
  Sales of Equity Securities and Use of Proceeds                           |     
|3.   | Defaults
  Upon Senior Securities                                                       |     
|4.   | Submission
  of Matters to a Vote of Security Holders                                   |     
|5.   | Other
  Information                                                                     |     
|6.   | Exhibits                                                                                |     

2

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|                                                           
|-----------------------------------------------------------
|EPL INTERMEDIATE, INC.                                     
|(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)
|                                                           
|CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)          
|(Amounts in thousands)                                     
|                                                           

|                                          |  |              |         |               |   |         | 
|----------------------------------------- |  | ------------ | ------- | ------------- | - | ------- | 
|                                          |  | DECEMBER 28, |         | SEPTEMBER 30, |  
|ASSETS                                    |  | 2005         |         | 2006          |  
|                                          |  |              |         |               |  
|                                          |  |              |         |               |   |         | 
|CURRENT
  ASSETS:                         |  |              |         |               |   |         | 
|Cash and cash equivalents                 |  | $            | 3,552   |               | $ | 7,406   | 
|Notes and accounts receivablenet         |  |              | 2,998   |               |   | 3,579   | 
|Inventories                               |  |              | 1,372   |               |   | 1,296   | 
|Prepaid expenses and other current assets |  |              | 3,189   |               |   | 3,394   | 
|Income taxes receivable                   |  |              | 3,825   |               |   | 362     | 
|Deferred income taxes                     |  |              | 1,520   |               |   | 1,520   | 
|                                          |  |              |         |               |   |         | 
|                                          |  |              |         |               |   |         | 
|Total current assets                      |  |              | 16,456  |               |   | 17,557  | 
|                                          |  |              |         |               |   |         | 
|                                          |  |              |         |               |   |         | 
|PROPERTY
  OWNEDNet                      |  |              | 69,121  |               |   | 71,265  | 
|                                          |  |              |         |               |   |         | 
|                                          |  |              |         |               |   |         | 
|PROPERTY
  HELD UNDER CAPITAL LEASESNet  |  |              | 2,186   |               |   | 1,773   | 
|                                          |  |              |         |               |   |         | 
|                                          |  |              |         |               |   |         | 
|GOODWILL                                  |  |              | 272,204 |               |   | 277,536 | 
|                                          |  |              |         |               |   |         | 
|DOMESTIC
  TRADEMARKSNet                 |  |              | 120,700 |               |   | 120,700 | 
|                                          |  |              |         |               |   |         | 
|OTHER
  INTANGIBLE ASSETSNet             |  |              | 13,698  |               |   | 12,399  | 
|                                          |  |              |         |               |   |         | 
|OTHER
  ASSETS                            |  |              | 11,554  |               |   | 12,081  | 
|                                          |  |              |         |               |   |         | 
|                                          |  |              |         |               |   |         | 
|TOTAL
  ASSETS                            |  | $            | 505,919 |               | $ | 513,311 | 
|                                          |  |              |         |               |   |         | 

|                                                            |            
|----------------------------------------------------------- | -----------
|See
  notes to condensed consolidated financial statements. | (continued)

3

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|                                                           
|-----------------------------------------------------------
|EPL INTERMEDIATE, INC.                                     
|(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)
|                                                           
|CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)          
|(Amounts in thousands, except share data)                  
|                                                           

|                                                                                           |  |              |         |               |   |         | 
|------------------------------------------------------------------------------------------ |  | ------------ | ------- | ------------- | - | ------- | 
|                                                                                           |  | DECEMBER 28, |         | SEPTEMBER 30, |  
|                                                                                           |  | 2005         |         | 2006          |  
|                                                                                           |  |              |         |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                       |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|CURRENT
  LIABILITIES:                                                                     |  |              |         |               |   |         | 
|Revolving credit facility                                                                  |  | $            | 2,775   |               | $ |        | 
|Current portion of note payable                                                            |  |              | 1,045   |               |   | 1,045   | 
|Current portion of obligations under
  capital leases                                      |  |              | 1,264   |               |   | 1,207   | 
|Accounts payable                                                                           |  |              | 10,215  |               |   | 10,813  | 
|Accrued salaries                                                                           |  |              | 4,184   |               |   | 4,104   | 
|Accrued vacation                                                                           |  |              | 1,728   |               |   | 1,755   | 
|Accrued insurance                                                                          |  |              | 3,539   |               |   | 3,667   | 
|Accrued interest                                                                           |  |              | 2,631   |               |   | 6,339   | 
|Accrued advertising                                                                        |  |              | 911     |               |   | 1,287   | 
|Other accrued expenses and current
  liabilities                                           |  |              | 3,683   |               |   | 4,026   | 
|Amounts due to predecessor stockholders                                                    |  |              |        |               |   | 2,146   | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|Total current liabilities                                                                  |  |              | 31,975  |               |   | 36,389  | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|NONCURRENT
  LIABILITIES:                                                                  |  |              |         |               |   |         | 
|Senior secured notes (2009 Notes)                                                          |  |              | 250     |               |   | 250     | 
|Senior unsecured notes (2013 Notes)                                                        |  |              | 123,425 |               |   | 123,597 | 
|Discount notes (2014 Notes)                                                                |  |              | 22,889  |               |   | 25,414  | 
|Note payableless current portion                                                          |  |              | 103,455 |               |   | 102,671 | 
|Obligations under capital leasesless
  current portion                                    |  |              | 5,211   |               |   | 4,369   | 
|Deferred income taxes                                                                      |  |              | 34,383  |               |   | 34,324  | 
|Other intangible liabilitiesnet                                                           |  |              | 9,037   |               |   | 7,795   | 
|Other noncurrent liabilities                                                               |  |              | 3,603   |               |   | 4,665   | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|Total noncurrent liabilities                                                               |  |              | 302,253 |               |   | 303,085 | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|COMMITMENTS
  AND CONTINGENCIES                                                            |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|STOCKHOLDERS
  EQUITY                                                                     |  |              |         |               |   |         | 
|Common stock, $.01 par value20,000
  shares authorized; 100 shares issued and outstanding |  |              |        |               |   |        | 
|Additional paid-in-capital                                                                 |  |              | 172,279 |               |   | 172,637 | 
|Retained earnings / (accumulated deficit)                                                  |  |              | (588    | )             |   | 1,200   | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|Total stockholders equity                                                                 |  |              | 171,691 |               |   | 173,837 | 
|                                                                                           |  |              |         |               |   |         | 
|                                                                                           |  |              |         |               |   |         | 
|TOTAL                                                                                      |  | $            | 505,919 |               | $ | 513,311 | 
|                                                                                           |  |              |         |               |   |         | 

|                                                            |            
|----------------------------------------------------------- | -----------
|See
  notes to condensed consolidated financial statements. | (concluded)

4

---



|                                                           
|-----------------------------------------------------------
|EPL INTERMEDIATE, INC.                                     
|(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)
|                                                           
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)    
|(Amounts in thousands)                                     
|                                                           

|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|---------------------------------------- |  | ---------------------------- | ------ | ---------------------------- | - | ------------------ |  | ---------------- | ------- |  | - | ------- | 
|                                         |  | 13 Weeks Ended September 30, |        | 39 Weeks Ended September 30, |  
|                                         |  | Predecessor
  2005           |        | Successor
  2006             |   | Predecessor
  2005 |  | Successor
  2006 |        
|                                         |  |                              |        |                              |   |                    |  |                  |        
|                                        
|OPERATING REVENUE:                       |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|Restaurant revenue                       |  | $                            | 57,538 |                              | $ | 61,673             |  | $                | 165,873 |  | $ | 182,502 | 
|Franchise revenue                        |  |                              | 4,023  |                              |   | 4,636              |  |                  | 11,524  |  |   | 12,833  | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|Total operating revenue                  |  |                              | 61,561 |                              |   | 66,309             |  |                  | 177,397 |  |   | 195,335 | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|OPERATING EXPENSES:                      |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|Product cost                             |  |                              | 18,349 |                              |   | 19,117             |  |                  | 52,651  |  |   | 57,125  | 
|Payroll and benefits                     |  |                              | 14,432 |                              |   | 15,459             |  |                  | 42,526  |  |   | 46,297  | 
|Depreciation and amortization            |  |                              | 3,655  |                              |   | 2,608              |  |                  | 10,732  |  |   | 7,488   | 
|Other operating expenses                 |  |                              | 16,829 |                              |   | 20,071             |  |                  | 51,291  |  |   | 59,098  | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|Total operating expenses                 |  |                              | 53,265 |                              |   | 57,255             |  |                  | 157,200 |  |   | 170,008 | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|OPERATING INCOME                         |  |                              | 8,296  |                              |   | 9,054              |  |                  | 20,197  |  |   | 25,327  | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|INTEREST EXPENSENet                     |  |                              | 4,737  |                              |   | 7,228              |  |                  | 14,238  |  |   | 21,446  | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|INCOME BEFORE PROVISION FOR INCOME TAXES |  |                              | 3,559  |                              |   | 1,826              |  |                  | 5,959   |  |   | 3,881   | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|PROVISION FOR INCOME TAXES               |  |                              | 1,459  |                              |   | 1,294              |  |                  | 2,298   |  |   | 2,093   | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 
|NET INCOME                               |  | $                            | 2,100  |                              | $ | 532                |  | $                | 3,661   |  | $ | 1,788   | 
|                                         |  |                              |        |                              |   |                    |  |                  |         |  |   |         | 

See notes to
condensed consolidated financial statements.

5

---



|                                                             
|-------------------------------------------------------------
|EPL INTERMEDIATE,
  INC.                                     
|(A Wholly
  Owned Subsidiary of El Pollo Loco Holdings, Inc.)
|                                                             
|CONDENSED
  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|(Amounts
  in thousands)                                     
|                                                             

|                                                                                          |  |                                      |         |                        |   |         |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------ | ------- | ---------------------- | - | ------- | -
|                                                                                          |  | 39
        Weeks Ended September 30, |        
|                                                                                          |  | Predecessor
        2005             |         | Successor
        2006 |  
|                                                                                          |  |                                      |         |                        |  
|                                                                                          |  |                                      |         |                        |   |         |  
|CASH
        FLOWS FROM OPERATING ACTIVITIES:                                             |  |                                      |         |                        |   |         |  
|Net
        income                                                                        |  | $                                    | 3,661   |                        | $ | 1,788   |  
|Adjustments
        to reconcile net income to net cash provided by operating activities: |  |                                      |         |                        |   |         |  
|Depreciation
        and amortization of property and intangible assets                   |  |                                      | 10,732  |                        |   | 7,488   |  
|Stock-based
        compensation expense                                                  |  |                                      |        |                        |   | 330     |  
|Interest
        accretion                                                                |  |                                      | 3,949   |                        |   | 2,697   |  
|(Gain)
        loss on disposal of assets                                                 |  |                                      | (492    | )                      |   | 4       |  
|Asset
        impairment                                                                  |  |                                      | 1,047   |                        |   |        |  
|Amortization
        of deferred financing costs                                          |  |                                      | 1,216   |                        |   | 984     |  
|Amortization
        of leasehold interest                                                |  |                                      | (1,122  | )                      |   | (286    | )
|Deferred
        income taxes                                                             |  |                                      |        |                        |   | (59     | )
|Changes
        in operating assets and liabilities:                                      |  |                                      |         |                        |   |         |  
|Notes
        and accounts receivablenet                                                 |  |                                      | (540    | )                      |   | (581    | )
|Inventories                                                                               |  |                                      | (59     | )                      |   | 76      |  
|Prepaid
        expenses and other current assets                                         |  |                                      | (606    | )                      |   | (205    | )
|Income
        taxes receivable / payable                                                 |  |                                      | 2,234   |                        |   | 3,463   |  
|Other
        assets                                                                      |  |                                      | (166    | )                      |   | 69      |  
|Accounts
        payable                                                                  |  |                                      | 1,131   |                        |   | 489     |  
|Accrued
        salaries and vacation                                                     |  |                                      | 719     |                        |   | (53     | )
|Accrued
        insurance                                                                 |  |                                      | 103     |                        |   | 128     |  
|Other
        accrued expenses and current and noncurrent liabilities                     |  |                                      | 5,276   |                        |   | 5,489   |  
|                                                                                          |  |                                      |         |                        |   |         |  
|                                                                                          |  |                                      |         |                        |   |         |  
|Net
        cash provided by operating activities                                         |  |                                      | 27,083  |                        |   | 21,821  |  
|                                                                                          |  |                                      |         |                        |   |         |  
|                                                                                          |  |                                      |         |                        |   |         |  
|CASH
        FLOW FROM INVESTING ACTIVITIES:                                              |  |                                      |         |                        |   |         |  
|Proceeds
        from asset disposition                                                   |  |                                      | 1,360   |                        |   | 2       |  
|Purchase
        of other assets                                                          |  |                                      | (1,086  | )                      |   |        |  
|Purchase
        of property                                                              |  |                                      | (10,219 | )                      |   | (8,994  | )
|Payment
        of acquisition costs                                                      |  |                                      |        |                        |   | (2,949  | )
|                                                                                          |  |                                      |         |                        |   |         |  
|                                                                                          |  |                                      |         |                        |   |         |  
|Net
        cash used in investing activities                                             |  |                                      | (9,945  | )                      |   | (11,941 | )
|                                                                                          |  |                                      |         |                        |   |         |  
|                                                                                          |  |                                      |         |                        |   |         |  
|CASH
        FLOWS FROM FINANCING ACTIVITIES:                                             |  |                                      |         |                        |   |         |  
|Proceeds
        from issuance of common stock                                            |  |                                      |        |                        |   | 28      |  
|Payment
        of obligations under capital leases                                       |  |                                      | (963    | )                      |   | (899    | )
|Payments
        on debt                                                                  |  |                                      | (7,852  | )                      |   | (3,559  | )
|Payment
        of deferred financing costs                                               |  |                                      |        |                        |   | (1,596  | )
|                                                                                          |  |                                      |         |                        |   |         |  
|                                                                                          |  |                                      |         |                        |   |         |  
|Net
        cash used in financing activities                                             |  |                                      | (8,815  | )                      |   | (6,026  | )
|                                                                                          |  |                                      |         |                        |   |         |  

|                                                            |            
|----------------------------------------------------------- | -----------
|See notes to condensed
  consolidated financial statements. | (continued)

6

---



|                                                           
|-----------------------------------------------------------
|EPL INTERMEDIATE, INC.                                     
|(A Wholly Owned Subsidiary of El Pollo Loco Holdings, Inc.)
|                                                           
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|(Amounts in thousands)                                     
|                                                           

|                                                                                     |  |                                |        |           |   |        | 
|------------------------------------------------------------------------------------ |  | ------------------------------ | ------ | --------- | - | ------ | 
|                                                                                     |  | 39 Weeks
  Ended September 30, |       
|                                                                                     |  | Predecessor                    |        | Successor |  
|                                                                                     |  | 2005                           |        | 2006      |  
|                                                                                     |  |                                |        |           |  
|                                                                                     |  |                                |        |           |   |        | 
|INCREASE IN CASH AND CASH EQUIVALENTS                                                |  | $                              | 8,323  |           | $ | 3,854  | 
|                                                                                     |  |                                |        |           |   |        | 
|CASH AND
  CASH EQUIVALENTS                                                         |  |                                |        |           |   |        | 
|Beginning of period                                                                  |  |                                | 5,636  |           |   | 3,552  | 
|                                                                                     |  |                                |        |           |   |        | 
|                                                                                     |  |                                |        |           |   |        | 
|CASH AND
  CASH EQUIVALENTS                                                         |  |                                |        |           |   |        | 
|End of period                                                                        |  | $                              | 13,959 |           | $ | 7,406  | 
|                                                                                     |  |                                |        |           |   |        | 
|                                                                                     |  |                                |        |           |   |        | 
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATIONCash paid during the period for:  |  |                                |        |           |   |        | 
|Interest (net of amounts capitalized)                                                |  | $                              | 6,309  |           | $ | 14,542 | 
|                                                                                     |  |                                |        |           |   |        | 
|                                                                                     |  |                                |        |           |   |        | 
|Income taxes                                                                         |  | $                              | 65     |           | $ |       | 
|                                                                                     |  |                                |        |           |   |        | 
|                                                                                     |  |                                |        |           |   |        | 
|SUPPLEMENTAL
  SCHEDULE OF NON-CASH INVESTING ACTIVITIES:                            |  |                                |        |           |   |        | 
|Unpaid purchases of property and
equipment                                           |  | $                              | 553    |           | $ | 109    | 
|                                                                                     |  |                                |        |           |   |        | 
|Recording of amounts due to predecessor
  stockholders in connection with acquistion |  | $                              |       |           | $ | 2,146  | 
|                                                                                     |  |                                |        |           |   |        | 

|                                                            |            
|----------------------------------------------------------- | -----------
|See notes to
  condensed consolidated financial statements. | (concluded)

7

---



|
|
|

EPL INTERMEDIATE, INC.
(A Wholly-Owned Subsidiary of El Pollo Loco Holdings, Inc.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1. Basis of Presentation

The
accompanying condensed consolidated financial statements are unaudited. EPL
Intermediate, Inc. (EPLI) and its wholly-owned subsidiary, El Pollo Loco,
Inc. (EPL and, together with EPLI, the Company) prepared these condensed
consolidated financial statements in accordance with Article 10 of Regulation
S-X. In compliance with those instructions, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted.

The
accompanying condensed consolidated financial statements include all
adjustments (consisting of normal recurring adjustments and accruals) that
management considers necessary for a fair presentation of its financial
position and results of operations for the interim periods presented. The
results of operations for the interim periods presented are not necessarily
indicative of the results that may be expected for the entire year.

The
accompanying condensed consolidated financial statements should be read in
conjunction with the Companys audited consolidated financial statements and
the related notes thereto included in the Companys Annual Report on Form 10-K
(File No. 333-115644) as filed with the Securities and Exchange Commission (the
Commission) on April 10, 2006.

The
Company uses a 52-, 53-week fiscal year ending on the last Wednesday of the
calendar year. In a 52-week fiscal year, each quarter includes 13 weeks of
operations; in a 53-week fiscal year, the first, second and third quarters each
include 13 weeks of operations and the fourth quarter includes 14 weeks of
operations. Fiscal year 2005, which ended December 28, 2005, and fiscal year
2006, which will end December 27, 2006, are both 52-week fiscal years. For
simplicity of presentation, the Company has described the 13-week periods ended
September 28, 2005 and September 27, 2006 as September 30, 2005 and 2006,
respectively.

The
Company is a wholly-owned subsidiary of El Pollo Loco Holdings, Inc.
(Holdings), which is a wholly owned indirect subsidiary of Chicken
Acquisition Corp (CAC) which is owned by Trimaran Pollo Partners, LLC (the
LLC). The Companys activities are performed principally through its
wholly-owned subsidiary, EPL, which develops, franchises, licenses, and
operates quick-service restaurants under the name El Pollo Loco®.

2. Acquisition of the Company

On
September 27, 2005, Holdings entered into a stock purchase agreement (the
Stock Purchase Agreement) among CAC, Holdings, EPLI, EPL, the equity holders
of Holdings, and American Securities Capital Partners, L.P. (ASCP). Pursuant
to the Stock Purchase Agreement, CAC, an affiliate of Trimaran Fund II, L.L.C.,
agreed to purchase (the Acquisition) all of Holdings issued and outstanding
common stock (other than certain shares exchanged by existing shareholders,
including management, representing approximately 7.3% of Holdings). On November
18, 2005, Holdings, CAC, and the other parties to the Stock Purchase Agreement
completed the Acquisition. The Company prior to the Acquisition is referred to
as the Predecessor and after the Acquisition is referred to as the
Successor.

8

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The
Acquisition was accounted for as purchase of Holdings by CAC in accordance with
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations. The aggregate purchase price was $435.9 million, consisting of
$204.5 million of cash, net of $19.6 million cash acquired, $16.8 million of
stock and options in Holdings, $9.3 million of direct acquisition costs (which
included $7.0 million paid to Trimaran Management, LLC, an entity related to
CAC, for services performed and expenses incurred in connection with the
Acquisition), and $185.7 million of debt that was refinanced or assumed in
connection with the Acquisition.

The
purchase price allocation was based on estimates of the fair value of the
assets acquired and liabilities assumed as determined by an independent
valuation company. The valuation is being finalized. The final determination of
assets acquired and liabilities assumed and final allocation of the purchase
price may differ from the amounts included in these financial statements.
Goodwill was adjusted for various liabilities that were identified during the
current period. Adjustments to the purchase price allocation are expected to be
finalized during fiscal 2006.  The
current period adjustment of $.7 million is the result of a revision to the
amount due to predecessor stockholders related to income tax refunds.

The following
transactions occurred in connection with the Acquisition and are reflected in
the Successors consolidated financial statements:

|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                 |  | a cash
  investment made by CAC totaling $155.5 million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | a
  contribution of shares and options of Holdings with a fair value of $16.8
  million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | the
  execution of a credit agreement governing new senior secured credit
  facilities providing for a $104.5 million term loan, drawn at closing, and a
  $25.0 million revolving credit facility, of which $2.8 million was drawn down
  at closing (see further description below);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | $123.4
  million received related to the issuance and sale of $125.0 in aggregate
  principal amount at maturity 11 3/4% senior notes (see description of 2013 Notes below);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | $22.5
  million received related to the issuance and sale of $39.3 million in
  aggregate principal amount at maturity 14.5% senior discount notes (see
  description of 2014 Notes below); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | $9.6 million
  of deferred financing fees incurred in connection with the borrowings
  described above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|The
  following activities occurred with respect to the existing indebtedness of
  the Predecessor and its subsidiary that was refinanced by the Successor and
  its subsidiary:
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | In October
  2005, EPL commenced a tender offer to purchase for cash any and all
  outstanding  9 1/4% Senior Secured Notes due 2009
  (the 2009 Notes), and EPLI commenced a tender offer to purchase for cash
  any and all outstanding 12 1/2%
  Senior Discount Notes due 2010 (the 2010 Notes). EPL and EPLI also
  solicited consents to amend the indentures governing the 2009 and 2010 Notes
  to eliminate substantially all of the restrictive covenants and certain
  events of default and modify other provisions contained in such indentures.
  As of September 30, 2006, all of the 2010 Notes have been purchased for cash,
  and all except for $250,000 in aggregate principal amount of the 2009 Notes
  have been purchased for cash. In connection therewith, substantially all of
  the restrictive covenants and events of default in the related indentures
  have been eliminated.
|                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                 |  | On November
  18, 2005, EPL Intermediate Finance Corp., a Delaware corporation  (Intermediate Finance) issued
  $39,342,000 aggregate principal amount at maturity of 14 1/2% Senior Discount Notes due 2014
  (the 2014 Notes). Intermediate Finance merged with and into                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

9

---



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | EPLI, with
  EPLI surviving the merger and assuming Intermediate Finances obligations
  under the notes and the related indenture. On November 18, 2005, EPL Finance
  Corp., a Delaware corporation (EPL Finance), issued $125,000,000 aggregate
  principal amount at maturity of 11 3/4% Senior Notes due 2013 (the
  2013 Notes). The 2013 Notes are guaranteed by EPLI. EPL Finance merged with
  and into EPL, with EPL surviving the merger and assuming EPL Finances
  obligations under the notes and the related indenture.                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | On November
  18, 2005, EPL entered into senior secured credit facilities with EPLI, as
  parent guarantor, Merrill Lynch Capital Corporation, as administrative agent,
  the other agents identified therein, Merrill Lynch & Co., Merrill Lynch,
  Pierce, Fenner & Smith Incorporated and Bank of America, N.A., as lead
  arrangers and book managers, and a syndicate of financial institutions and
  institutional lenders. The senior secured credit facilities provide for an
  $104.5 million term loan and $25.0 million in revolving availability. In
  connection therewith, EPLs prior credit facility with SunTrust Bank was paid
  off in full.

3. Asset Impairment

The
Company periodically reviews the performance of company-operated stores for
indicators of asset impairment. If the Company concludes that the carrying
value of certain assets will not be recovered based on expected undiscounted
future cash flows, an impairment write-down is recorded to reduce the assets to
their estimated fair value. As a result of this review, the Company recorded an
impairment charge of approximately $0.2 million in March 2005 for one
under-performing company-operated store that will continue to be operated and
$0.9 million in June 2005 for one under-performing company-operated store that
will also continue to be operated. The impairment charges are included in other
operating expenses in the accompanying condensed consolidated statements of
income.

4. Stock-Based Compensation

As
of September 30, 2006, options to purchase 288,417 shares of common stock of
CAC at the fair value of the shares at the date of grant were outstanding.
Included in that amount are 81,540 options that are fully vested; the remaining
options vest 100% on the seventh anniversary of the grant date, 100% upon a
change of control at CAC if certain conditions are met, or partially vest upon
the Companys attaining annual financial or other goals, with the remaining
unvested portion vesting on the seventh anniversary of the grant date.

In
the event of a successful completion of an initial public offering of the
Companys common shares, 50% of the then unvested options to purchase shares of
CAC common stock will vest 100% immediately upon consummation of an offering.
Those options along with any previously vested options will be converted into
options to purchase shares of the Companys common stock and will remain
exercisable in accordance with the terms of the original grant. The other 50%
of the then unvested options shall automatically terminate and the optionees
shall be entitled to receive grants of the Companys restricted stock with an
aggregate economic value equal to the fair market value (measured at the close
of business of the first day of public trading) of the shares of CAC common
stock into which the terminated unvested options were exercisable minus the aggregate
exercise price of such options.

In
December 2004, the FASB issued Statement No. 123 (revised 2004), Share-Based
Payment, (SFAS 123(R)) which requires companies to expense the estimated fair
value of employee stock options and similar awards based on the grant-date fair
value of the award. The cost will be recognized over the period during which an
employee is required to provide service in exchange for the award, usually the
vesting period. The Company adopted the provisions of SFAS 123(R) on December
29, 2005 using a prospective application. Under the prospective application,
SFAS 123(R), applies to new awards and any awards that are modified or
cancelled subsequent to the date of adoption of SFAS 123(R). Prior periods are
not revised for comparative purposes. Because the Company used the minimum
value method for its pro forma disclosures under SFAS 123, existing options
will continue to be accounted for in accordance with APB Opinion No. 25 unless
such options are modified, repurchased or cancelled after the effective date.

10

---



In
order to meet the fair value measurement objective, the Company utilizes the
Black-Scholes option-pricing model to value compensation expense for
share-based awards granted beginning in fiscal 2006 and developed estimates of
various inputs including forfeiture rate, expected term life, expected
volatility, and interest rate. The forfeiture rate is based on historical rates
and reduces the compensation expense recognized. The expected term of options
granted is derived from both historical and forecasted exercise activity for
options granted within a specified date range. The risk-free interest rate is
based on the implied yield on a U.S. Treasury constant maturity with a
remaining term equal to the expected term of the Companys employee stock options.
Expected volatility is based on the comparative industry entity data. The
Company does not anticipate paying any cash dividends in the foreseeable future
and therefore uses an expected dividend yield of zero for option valuation.

The
weighted-average estimated fair value of employee stock options granted during
the 39 weeks ended September 30, 2006 was $43.59 per share using the
Black-Scholes model with the following weighted-average assumptions used to
value the option grants:

|                         |  |                                      |           | 
|------------------------ |  | ------------------------------------ | --------- | 
|                         |  |                                      |           | 
|                         |  |                                      |           | 
|                         |  | 39 weeks ended 
  September 30, 2006 |          
|                         |  |                                      |           | 
|                         |  |                                      |           | 
|Expected volatility      |  |                                      | 41%       | 
|                         |  |                                      |           | 
|Expected term life       |  |                                      | 7.0 years | 
|                         |  |                                      |           | 
|Forfeiture rate          |  |                                      | 1.22%     | 
|                         |  |                                      |           | 
|Risk free interest rates |  |                                      | 4.46%     | 
|                         |  |                                      |           | 
|Expected dividend        |  |                                      | 0%        | 

Under the prospective method of SFAS 123R, compensation expense was recognized
during the 39 weeks ended September 30, 2006 for all stock based payments
granted after December 28, 2005 based on the grant date fair value estimated in
accordance with the provisions of SFAS 123R. During the 13 weeks and 39 weeks
ended September 30, 2006, the Company recognized share-based compensation
expense before tax of $28,000 and $84,000, respectively, related to stock
option grants after December 28, 2005. This expense was included in other
operating expenses. This incremental stock based compensation expense caused a
decrease to net income of $12,000 and $43,000 during the 13 weeks and 39 weeks
ended September 30, 2006, respectively. The adoption of SFAS 123(R) did not
impact the Companys cash flows.

Upon
consummation of an initial public offering, the Company would incur
compensation expense related to the immediate vesting of 50% of the unvested
portion of the options granted in 2006. The expense will be determined by
calculating 50% of the unrecognized compensation cost as of the date of the
completion of the offering.

For
options granted prior to the adoption of SFAS 123(R), the Company accounts for
unvested options in accordance with APB Opinion No. 25. No expense has been
recorded and none will be recognized for options whose vesting will accelerate
upon completion of an initial public offering as these terms were specified in
the original December 2005 option agreement that was executed in connection with
the Acquisition and do not represent modifications of original terms.

The
Company accounts for unvested options that will be cancelled and replaced with
restricted stock upon completion of an initial public offering using variable
accounting which requires the Company to recognize expense in future reporting
periods based on the change in incremental value of the award at each reporting
period. A reduction in compensation expense of $19,000 and a corresponding
increase in net

11

---



income
of $8,000 was recognized for the 13 weeks ended September 30, 2006, and
compensation expense of $246,000 and a corresponding decrease in net income of
$126,000 was recognized for the 39 weeks ended September 30, 2006. At the date
of cancellation of the original award and issuance of the replacement award
upon completion of an offering, the Company will begin applying SFAS 123(R) to
the award. SFAS 123(R) requires recording compensation expense for the
incremental cost (the difference between the fair value of the award
immediately before and after the modification) plus any unamortized intrinsic
value computed on the modification date. As the fair value of the award will be
equivalent before and after the modification, there will be no incremental cost
related to this stock award upon modification. However, compensation expense
will be recorded for the unamortized intrinsic value computed on the
modification date.

As
of September 30, 2006, there was approximately $2.6 million of total
unrecognized compensation cost related to nonvested options, which is expected
to be recognized over a remaining vesting period of approximately 6.3 years or
earlier upon the successful completion of an initial public offering of the
Companys common stock.

Changes in stock options for the 39 weeks
ended September 30, 2006 are as follows:

|                                                                 |  |        |         |                                |   |                                      |  |  |        |  |  |  | 
|---------------------------------------------------------------- |  | ------ | ------- | ------------------------------ | - | ------------------------------------ |  |  | ------ |  |  |  | 
|                                                                 |  | Shares |         | Weighted-AverageExercise Price |   | Options
        
        Exercisable | 
|                                                                 |  |        |         |                                |   |                                      | 
|                                                                 |  |        |         |                                |   |                                      |  |  |        | 
|OutstandingDecember
        28, 2005                            |  |        | 277,608 |                                | $ | 63.53                                |  |  | 81,835 | 
|Grants
        (weighted-average fair value of $43.59 per share) |  |        | 17,778  |                                | $ | 86.43                                |  |  |        | 
|Exercised                                                        |  |        | (295    | )                              | $ | 10.80                                |  |  |        | 
|Forfeited                                                        |  |        | (6,674  | )                              | $ | 86.43                                |  |  |        | 
|                                                                 |  |        |         |                                |   |                                      |  |  |        | 
|                                                                 |  |        |         |                                |   |                                      |  |  |        | 
|                                                                 |  |        |         |                                |   |                                      |  |  |        | 
|OutstandingSeptember
        30, 2006                           |  |        | 288,417 |                                | $ | 64.47                                |  |  | 81,540 | 
|                                                                 |  |        |         |                                |   |                                      |  |  |        | 



Outstanding stock options
  at September 30, 2006 are summarized as follows:

|                         |  |                       |         |                                                                   |  |                                        |  |                      |       |                                        |  |        |  |   |       | 
|------------------------ |  | --------------------- | ------- | ----------------------------------------------------------------- |  | -------------------------------------- |  | -------------------- | ----- | -------------------------------------- |  | ------ |  | - | ----- | 
|Range of Exercise Prices |  | Number 
  Outstanding |         | Weighted-
  Average
  Remaining
  Contractual
  Life
  (in Years) |  | Weighted-
  Average
  Exercise
  Price |  | Number
  Exercisable |       | Weighted-
  Average
  Exercise
  Price | 
|$2.98                    |  |                       | 17,694  |                                                                   |  | 3.6                                    |  | $                    | 2.98  |                                        |  | 17,694 |  | $ | 2.98  | 
|$7.56                    |  |                       | 24,026  |                                                                   |  | 4.8                                    |  | $                    | 7.56  |                                        |  | 24,026 |  | $ | 7.56  | 
|$9.68-$11.77             |  |                       | 33,074  |                                                                   |  | 6.2                                    |  | $                    | 10.67 |                                        |  | 33,074 |  | $ | 10.67 | 
|$15.48-$20.60            |  |                       | 6,746   |                                                                   |  | 8.4                                    |  | $                    | 18.59 |                                        |  | 6,746  |  | $ | 18.59 | 
|$86.43                   |  |                       | 206,877 |                                                                   |  | 9.5                                    |  | $                    | 86.43 |                                        |  |       |  | $ |      | 
|                         |  |                       | 288,417 |                                                                   |  | 8.3                                    |  | $                    | 64.47 |                                        |  | 81,540 |  | $ | 8.74  | 

The weighted average remaining contractual
life for options exercisable as of September 30, 2006 was 5.1 years.

12

---



The
aggregate intrinsic value of options outstanding and options exercisable as of
September 30, 2006 was $12.7 million and $8.2 million, respectively. The
intrinsic value is calculated as the difference between the market value as of
September 30, 2006 and the exercise price of the options outstanding and
options exercisable.

5. Commitments and Contingencies

On
or about April 16, 2004, three former employees, Elias, Ramirez and Rivera,
filed a class action suit in the Superior Court of the State of California,
County of Los Angeles, against EPL on behalf of all putative class members
(former and current general managers and restaurant managers from April 2000 to
present) alleging certain violations of California labor laws, including alleged
improper classification of general managers and restaurant managers as exempt
employees. Plaintiffs requested remedies include compensatory damages for
unpaid wages, interest, certain statutory penalties, disgorgement of alleged
profits, punitive damages and attorneys fees and costs as well as certain
injunctive relief. The complaint was served on EPL on April 19, 2004. The court
has ordered the class action stayed pending the arbitration of one of the named
putative class plaintiffs as a result of his execution of a mandatory
arbitration agreement with EPL. While the Company intends to defend against
this action vigorously, the ultimate outcome of this case is presently not
determinable as it is in a preliminary phase. Thus, the Company cannot at this
time determine the likelihood of an adverse judgment or a likely range of
damages in the event of an adverse judgment. If a class were ultimately
certified, any settlement of or judgment arising from such lawsuit could be
material, and the Company cannot give any assurance that the Company would have
the resources available to pay such settlement or judgment.

On
or about October 18, 2005, Salvador Amezcua, on behalf of himself and all
others similarly situated, filed a purported class action complaint against EPL
in the Superior Court of the State of California, County of Los Angeles. Mr.
Amezcua has been voluntarily dismissed as the purported class representative in
this case and replaced by a new individual, Carlos Olvera. This action alleges
certain violations of California labor laws and the California Business and
Professions Code, based on, among other things, failure to pay overtime
compensation, failure to provide meal periods, unlawful deductions from
earnings and unfair competition. Plaintiffs requested remedies include
compensatory and punitive damages, injunctive relief, disgorgement of profits
and reasonable attorneys fees and costs. EPL was served with this complaint on
December 16, 2005. The court has ordered the case designated as complex and
related to the Elias case referenced above, and both cases have been assigned
to the complex litigation panel. The Company is awaiting the Courts decision
on its motion to compel the arbitration of Mr. Olvera and its request for a
stay of the class action. While the Company intends to defend against this
action vigorously, the ultimate outcome of this case is presently not
determinable as it is in a preliminary phase. Thus, the Company cannot at this
time determine the likelihood of an adverse judgment or a likely range of
damages in the event of an adverse judgment. Any settlement of or judgment with
a negative outcome arising from such lawsuit could have an adverse material
impact.

The
contractual rights to use the name El Pollo Loco and certain related trademarks
and intellectual property in Mexico were assigned to EPL in 1996, pursuant to
an agreement between EPL and EPL-Mexico, S.A. de C.V., a company controlled by
Jose Francisco Ochoa, the founder of the first El Pollo Loco restaurant in
Mexico and the United States. As consideration for the assignment of such
rights, EPL agreed, subject to the terms and conditions of the agreement, to
use commercially reasonable efforts to develop a minimum number of restaurants
in Mexico by February 2006 and to pay certain fees for each such restaurant
that EPL develops. On March 31, 2004, EPL-Mexico filed suit against EPL in
state court in Laredo, Texas alleging, among other things, that EPL breached
its agreement with EPL-Mexico by failing to exploit the trademarks and develop
new restaurants in Mexico and claiming that the right to use the name El Pollo
Loco in Mexico should revert to EPL-Mexico. EPL-Mexico also initiated an
amparo proceeding, which is an administrative challenge under Mexican law,
to EPLs ownership of the trademarks before the Mexican Intellectual Property
Institute. This proceeding was resolved in favor of EPL by Mexicos Supreme
Court of Justice of the Nation. EPL successfully removed the Texas action to
federal court and EPL has filed a counterclaim against EPL-Mexico to defend its
rights to the trademarks in Mexico. The Company believes that EPL-Mexicos
claims are without merit and that, based on the rights we possess pursuant to
the agreement, EPL possesses adequate legal and contractual rights to use the
intellectual property in question in Mexico. However, failure to prevail in
this action could result in the loss

13

---



of EPLs
ownership in Mexico of the El Pollo Loco trademarks and intellectual property
at issue, which could affect the EPL brand in the United States and elsewhere.

On
June 22, 2006, the Company filed a complaint for declaratory relief, breach of
written contract and bad faith against Arch Specialty Insurance Company,
seeking damages and equitable relief for Archs refusal to carry out the
obligations of its insurance contract to defend and indemnify, among other
things, El Pollo Loco in the EPL-Mexico v. EPL-USA trademark litigation
referenced above. The case is still in the pleading phase.

The
Company is also involved in various other claims and legal actions that arise
in the ordinary course of business. The Company does not believe that the
ultimate resolution of these actions will have a material adverse effect on the
Companys financial position, results of operations, liquidity and capital
resources. A significant increase in the number of these claims or an increase
in amounts owing under successful claims could materially adversely affect the
Companys business, financial condition, results of operation and cash flows.

6. Predecessor Debt

In
December 2003, EPL issued the 2009 Notes, consisting of $110.0 million of
senior secured notes accruing interest at 9.25% per annum, due 2009. In
March 2004, EPLI issued the 2010 Notes, consisting of $70.0 million in
aggregate principal amount at maturity of 12 1/2% senior discount notes
due 2010. In October 2005, EPL and EPLI commenced tender offers to purchase all
outstanding 2009 Notes and 2010 Notes (collectively, the Notes),
respectively; concurrently, EPL and EPLI solicited consents to amend the
indentures governing the Notes to eliminate substantially all of the
restrictive covenants and certain events of default and to modify other
provisions contained in the indentures. As of September 30, 2006, all of the
Notes, with the exception of $250,000 of 2009 Notes, have been purchased. In
connection therewith, substantially all of the restrictive covenants and events
of default in the related indentures have been eliminated.

The
Predecessors notes payable, which consisted of approximately $7.3 million due
to SunTrust Bank (SunTrust) at December 29, 2004, were repaid in 2005.

7. Senior Unsecured Notes Payable

On
November 18, 2005, EPL Finance issued the 2013 Notes, consisting of $125.0
million aggregate principal amount of 11 3/4% senior notes due 2013 in a
private placement. Interest is payable in May and November beginning
May 15, 2006. The 2013 Notes are unsecured, are guaranteed by EPLI, and
may be redeemed, at the discretion of the issuer, after November 15, 2009.

EPL
Finance merged with and into EPL, with EPL surviving the merger and assuming
EPL Finances obligations under the 2013 Notes and the related indenture. The
indenture contains certain provisions which may prohibit EPLs ability to incur
additional indebtedness, sell assets, engage in transactions with affiliates,
and issue or sell preferred stock, among other items.

In
connection with the issuance of the 2013 notes, EPL filed a registration
statement in April 2006 enabling holders to exchange the privately placed 2013
Notes for publicly registered notes with, subject to limited exceptions,
identical terms. An amended registration statement was filed and became effective
on October 12, 2006.

EPL
incurred direct costs in connection with the offering of the 2013 Notes. These
costs have been capitalized and are included in other assets in the
accompanying balance sheets. The Company used the proceeds from the 2013 Notes
to purchase substantially all of the outstanding 2009 Notes.

On
May 15, 2006, EPL, our wholly owned subsidiary, commenced a tender offer to
purchase for cash all of the outstanding 2013 Notes and EPL solicited consents
to amend the indenture governing the 2013 Notes to remove substantially all of
the restrictive covenants and certain events of default and modify other
provisions contained in such indenture. The tender offer and consent
solicitation for the 2013 Notes

14

---



were
conditioned upon the completion of an initial public offering. On October 12, 2006, Holdings filed
a letter of withdrawal with the SEC withdrawing its intended initial public
offering. Concurrently, the Company withdrew its tender offer for the 2013 and
2014 bonds. (See Note 12)

As
a holding company, the stock of EPL constitutes EPLIs only material asset.
Consequently, EPL conducts all of the Companys consolidated operations and
owns substantially all of the consolidated operating assets. The Companys
principal source of the cash required to pay its obligations is the cash that
EPL generates from its operations. EPL is a separate and distinct legal entity,
has no obligation to make funds available to EPLI, and the 2013 Notes and the
2014 Notes (see Note 9) have restrictions that limit distributions or dividends
to be paid by EPL to the EPLI. Conditions that would allow for distributions or
dividends to be made include compliance with a Fixed Charge Coverage Ratio test
(as defined in the indenture governing the 2013 Notes) and cash received from
the proceeds of new equity contributions. As of September 30, 2006, we are
restricted from incurring additional indebtedness, as EPL does not currently
meet the fixed charge coverage ratio. There are also some allowed
distributions, payments and dividends for other specific events. Distributions,
dividends or investments would also be limited to 50% of consolidated net
income under certain circumstances.

8. Notes Payable to Merrill Lynch, Bank of
America, et al and Revolving Credit Facility

On
November 18, 2005, EPL entered into senior secured credit facilities (the
Credit Facility) with EPLI, as parent guarantor, Merrill Lynch Capital
Corporation, as administrative agent, the other agents identified therein,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bank of America, N.A., as lead arrangers and book managers,
and a syndicate of financial institutions and institutional lenders. The Credit
Facility provides for a $104.5 million term loan and $25.0 million in revolving
availability. Of this senior secured revolving credit facility, EPL drew down
$2.8 million and issued $8.1 million of letters of credit to replace existing
letters of credit. Future principal payments under the new term loan at
September 30, 2006 are as follows (in thousands).

|                                           |   |         | 
|------------------------------------------ | - | ------- | 
|Year Ending December 31                    |   |         | 
|                                           |   |         | 
|2006 (October 1st 
        December 31st) | $ | 261     | 
|2007                                       |   | 1,045   | 
|2008                                       |   | 1,045   | 
|2009                                       |   | 1,045   | 
|2010                                       |   | 1,045   | 
|Thereafter                                 |   | 99,275  | 
|                                           |   |         | 
|                                           | $ | 103,716 | 
|                                           |   |         | 

The
Credit Facility bears interest, payable quarterly, at a Base Rate or LIBOR, at
EPLs option, plus an applicable margin. The applicable margin is based on
EPLs financial performance, as defined. The applicable margin rate was 3.00%
with respect to LIBOR and 2.00% with respect to Base Rate advances and
thereafter ranges from: 2.75% to 2.25% with respect to LIBOR advances and 1.75%
to 1.25% with respect to Base Rate advances. The effective rate at September
30, 2006 was 8.4%. The Credit Facility is secured by a first-priority pledge by
Holdings of all of the outstanding stock of the Company, a first priority
pledge by the Company of all of EPLs outstanding stock and a first priority
security interest in substantially all of EPLs tangible and intangible assets.
In addition, the Credit Facility is guaranteed by the Company and Holdings. The
Credit Facility matures on November 18, 2011. At September 30, 2006, we had
outstanding letters of credit totaling $7.4 million, which served as collateral
for our various workers compensation insurance programs.

15

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9. Discount Notes

On
November 18, 2005, Intermediate Finance issued the 2014 Notes in a private
placement. Intermediate Finance merged with and into EPLI, with EPLI surviving
the merger and assuming Intermediate Finances obligations under the notes and
the related indenture. The indenture restricts the ability of EPLI and its
subsidiaries to incur additional indebtedness, sell assets, engage in
transactions with affiliates, and issue or sell preferred stock, among other
items. The indenture also limits the ability of EPL or other subsidiaries to
make dividend or other payments to EPLI and for EPLI to make payments to
Holdings (see Note 7).

At
September 30, 2006, the Company had $25.4 million outstanding in aggregate
principal amount of the 2014 Notes. No cash interest will accrue on the 2014
Notes prior to November 15, 2009. Instead, the principal value of the 2014
Notes will increase (representing accretion of original issue discount) from
the date of original issuance until but not including November 15, 2009 at a
rate of 14 1/2% per annum compounded annually, so that the accreted value of
the 2014 Notes on November 15, 2009 will be equal to the full principal amount
of $39.3 million at maturity. Beginning on November 15, 2009, cash interest
will accrue on the 2014 Notes at an annual rate of 14 1/2% per annum payable
semi-annually in arrears on May 15 and November 15 of each year, beginning May
15, 2010. Principal is due on November 15, 2014.

The
2014 Notes are effectively subordinated to all existing and future indebtedness
and other liabilities of the Companys subsidiaries. The 2014 Notes are
unsecured and are not guaranteed. If any of the 2014 Notes are outstanding at
May 15, 2011, the Company is required to redeem for cash a portion of each note
then outstanding at 104.5% of the accreted value of such portion of such note,
plus accrued and unpaid interest. Additionally, the Company may, at its
discretion, redeem any or all of the 2014 Notes, subject to certain provisions.

In
connection with the issuance of the 2014 notes, the Company agreed to file a
registration statement within 150 days after the issuance of the 2014 Notes,
enabling holders to exchange the privately placed 2014 Notes for publicly
registered notes with, subject to limited exceptions, identical terms. The
Company filed such registration statement on April 14, 2006. An amended
registration statement was filed and became effective on October 12, 2006.

EPLI
incurred direct costs in connection with its offering of the 2014 Notes. These
costs have been capitalized and are included in other assets in the
accompanying balance sheets.

On
May 15, 2006, the Company commenced a tender offer to purchase for cash all of
the outstanding 2014 Notes and the Company solicited consents to amend the
indenture governing the 2014 Notes to remove substantially all of the
restrictive covenants and certain events of default and modify other provisions
contained in such indenture. The tender offer and consent solicitation for the
2013 Notes were conditioned upon the completion of the initial public offering.
On
October 12, 2006, Holdings filed a letter of withdrawal with the SEC
withdrawing its intended IPO. Concurrently, the Company withdrew our tender
offer for the 2013 and 2014 bonds. (See Note 12.)

10. Income Taxes

The
Companys taxable income or loss is included in the consolidated federal and
state income tax returns of Holdings. The Company records its provision for
income taxes based on its separate stand-alone operating results using the
asset and liability method. The Company recorded a provision for income taxes
of $2.3 million and $2.1 million for the 39-week periods ended September 30,
2005 and 2006, respectively. The effective tax rates for the 39 weeks ended
September 30, 2005 and 2006, were 41.0% and 48.7%, respectively.

11. New Accounting Pronouncements

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157 (SFAS 157),Fair Value Measurements.
SFAS 157 defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles and expands disclosures about fair
value measurements. The Company expects to adopt SFAS 157 effective January 1,
2008, as required. The Company has not yet

16

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determined the
impact, if any, of adopting the provisions of SFAS 157 on its financial
position, results of operations and liquidity.

In
July 2006, the FASB issued Interpretation No. 48, Accounting for Income Tax
Uncertainties (FIN 48). FIN 48 defines the threshold for recognizing the
benefits of tax return positions in the financial statements as more-likely-than-not
to be sustained by the taxing authority. The recently issued literature also
provides guidance on the derecognition, measurement and classification of
income tax uncertainties, along with any related interest and penalties. FIN 48
also includes guidance concerning accounting for income tax uncertainties in
interim periods and increases the level of disclosures associated with any
recorded income tax uncertainties. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The differences between the amounts
recognized in the statements of financial position prior to the adoption of FIN
48 and the amounts reported after adoption will be accounted for as a
cumulative-effect adjustment recorded to the beginning balance of retained
earnings. The disclosure of this cumulative effect of the change on retained
earnings in the statement of financial position is required only in the year of
adoption. The Company has not yet determined the impact, if any, of adopting
the provisions of FIN 48 on its financial position, results of operations and
liquidity.

12. Initial Public Offering

On
May 8, 2006, the parent of EPLI, Holdings, filed a registration statement with
the Securities and Exchange Commission for an initial public offering of
approximately $135 million of common stock. On October 12, 2006, Holdings
withdrew its registration statement on Form S-1 as current market conditions
made it inadvisable to proceed with the offering at that time. No shares of
common stock of Holdings were issued or sold under the registration statement.

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

You
should read the following discussion together with our unaudited condensed
consolidated financial statements and related notes thereto included elsewhere
in this filing.

Certain
statements contained within this report constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are those that do not relate solely to historical fact. They
include, but are not limited to, any statement that may predict, forecast,
indicate or imply future results, performance, achievements or events. They may
contain words such as believe, anticipate, expect, estimate, intend,
project, plan, will, should, may, could or words or phrases of
similar meaning.

These
forward-looking statements reflect our current views with respect to future
events and are based on assumptions and are subject to risks and uncertainties.
Also, these forward-looking statements present our estimates and assumptions
only as of the date of this report. Except for our ongoing obligation to
disclose material information as required by federal securities laws, we do not
intend to update you concerning any future revisions to any forward-looking
statements to reflect events or circumstances occurring after the date of this
report.

Factors
that could cause actual results to differ materially from those expressed or
implied by the forward-looking statements include concerns about food-borne
illnesses, negative publicity, whether or not valid, adverse public perception
due to the occurrence of avian flu, increases in the cost of chicken, our
dependence upon frequent deliveries of food and other supplies, our sensitivity
to events and conditions in the greater Los Angeles area, our ability to open
new restaurants in new and existing markets, our reliance in part on our franchisees,
our vulnerability to changes in consumer preferences and economic conditions,
our ability to compete successfully with other quick service and fast casual
restaurants, our ability to service our indebtedness, matters relating to
employment and labor laws, labor shortages or increases in labor costs, our
ability to renew leases at the end of their terms, the impact of federal, state
or local government regulations relating to the preparation and sale of food,
zoning and building codes, and employee, environmental and other matters; our
ability to protect our name and logo and other proprietary

17

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information;
and the impact of litigation. Actual results may differ materially due to these
risks and uncertainties and those described in our Annual Report on Form 10-K
(File No. 333-115644) as filed with the Securities and Exchange Commission on
April 10, 2006.

We
use a 52-, 53-week fiscal year ending on the last Wednesday of the calendar
year. For simplicity of presentation, we have described the 39-week periods
ended September 28, 2005 and September 27, 2006 as September 30, 2005 and 2006,
respectively. In a 52-week fiscal year, each quarter includes 13 weeks of
operations; in a 53-week fiscal year, the first, second and third quarters each
include 13 weeks of operations and the fourth quarter includes 14 weeks of
operations. Fiscal year 2005, which ended December 28, 2005, and fiscal year
2006, which ends December 27, 2006, are both 52-week fiscal years. References
to our restaurant system mean both company-operated and franchised
restaurants. Unless otherwise indicated, references to our restaurants or
results or statistics attributable to one or more restaurants without expressly
identifying them as company-operated, franchise or the entire restaurant system
mean our company-operated restaurants only.

Overview

EPL
Intermediate, Inc. (EPLI) through its wholly-owned subsidiary El Pollo Loco,
Inc. (EPL and collectively with EPLI, the Company, we, us and our)
owns, operates and franchises restaurants specializing in marinated
flame-grilled chicken. As of September 30, 2006, our restaurant system had 348
restaurants, consisting of 148 company-operated and 200 franchised locations,
located principally in California, with additional restaurants in Arizona,
Nevada, Texas, Illinois and Colorado. Our typical restaurant is a freestanding
building ranging from approximately 2,200 to 2,600 square feet with seating for
approximately 60 customers and offering drive-thru convenience.

Our
revenue is derived from two primary sources, company-operated restaurant
revenue and franchise revenue, the latter of which is comprised principally of
franchise royalties and to a lesser extent franchise fees and sublease rental
income. For the 13 and 39 weeks ended September 30, 2006, same-store sales for
restaurants systemwide increased 3.8 % and 6.3%, respectively, over the 13 and
39 weeks ended September 30, 2005.

The
increase in company-operated restaurant revenue is due to growth in new
company-operated restaurants and to increases in same-store sales, which
includes transaction and price increases over this period. We implemented a
chicken meal restructuring in May 2005 and a menu price increase in January and
March of 2006. The chicken meal restructuring consisted of changing our menu to
allow our customers to select chicken meals specifying white meat, dark meat or
mixed pieces and changing prices accordingly. We plan to open seven to ten
company-operated restaurants per year over the next few years, which is
slightly higher than our company-operated restaurant growth over the last few
years. Many factors can influence sales at all or specific restaurants,
including increased competition, strength of marketing promotions, the
restaurant managers operational execution and changes in local market
conditions and demographics.

Franchise
revenue consists of royalties, initial franchise fees and franchise rental
income. Royalties average 4% of the franchisees net sales. We believe that new
franchise restaurant growth will increase as we sign development agreements
with experienced franchisees in new and existing markets. Currently, we are
legally authorized to market franchises in all 50 states. We have entered into area
development agreements that, beginning in the fourth quarter of 2004, have
resulted in area development fees being recognized as the related restaurants
open. We sublease facilities to certain franchisees and the sublease rent is
included in our franchise revenue. This revenue exceeds rent payments made
under the leases that are included in franchise expense. Since we do not expect
to lease or sublease new properties to our franchisees as we expand our
franchise restaurants, we expect the portion of franchise revenue attributable
to franchise rental income to decrease over time.

Product
cost includes food and paper costs and is our largest single expense. It is
subject to increase or decrease based on commodity cost changes, and depends in
part on the success of controls we have in place to manage product cost in the
restaurants. In February 2005, we renewed our chicken contracts with terms
ranging from two to three years at higher prices than the expiring contracts.
One of these contracts

18

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provides a floor and ceiling price for the chicken we buy from
the supplier after the first year. We implemented the chicken meal
restructuring in May 2005 and price increases in January and March of 2006 that
have partially mitigated the impact of higher chicken prices on our
profitability.

Payroll
and benefits comprise the next largest single expense. Payroll and benefits
have been and remain subject to inflation, including salaries due to minimum
wage increases and expenses for health insurance and workers compensation
insurance. On September 12, 2006, the state of California passed legislation
increasing the minimum wage in the state from $6.75 per hour to $7.50 per hour
effective January 1, 2007.  Additionally
on January 1, 2008, the minimum wage in California will go up to $8.00 per
hour. A significant number of our hourly staff are paid at rates consistent
with the applicable federal or state minimum wage and, accordingly, increases
in the minimum wage will increase our labor cost. Workers compensation
insurance costs are subject to a number of factors, and although the state of
California passed legislation designed to reduce workers compensation
insurance expense to employers, we cannot predict whether such legislation will
actually reduce our workers compensation insurance expense. We have seen a
reduction in the number of workers compensation claims due to employee safety
initiatives that we began implementing in fiscal year 2002.

Depreciation
and amortization expense changed subsequent to the Acquisition, which is a
result of fair values assigned to assets acquired and liabilities assumed at
the date of the Acquisition as determined by an independent valuation company.

Other
operating expenses include restaurant other operating expense, franchise
expense, and general and administrative expense.

Occupancy
expense increased subsequent to the Acquisition as a result of the revaluation
of the fair market value of leases assumed in the Acquisition and the reduction
in the annual amortization of the unfavorable leasehold interest liability.

Restaurant
other operating expense includes occupancy, advertising and other costs such as
utilities, repair and maintenance, janitorial and cleaning and operating
supplies.

Franchise
expense consists primarily of rent expense that we pay to landlords associated
with leases under restaurants we are subleasing to franchisees. Franchise
expense usually fluctuates primarily as subleases expire and is to some degree
based on rents that are tied to a percentage of sales calculation. Because we
do not expect to lease or sublease new properties to our franchisees as we
expand our franchise restaurants, we expect franchise expense as a percentage
of franchise revenue to decrease over time. Expansion of our franchise
operations does not require us to incur material additional capital
expenditures.

General
and administrative expense increased as a result of the issuance of the 2009
Notes, the 2010 Notes, the 2013 Notes and the 2014 Notes. Since the issuance of
the 2009 Notes in December 2003, we have incurred and will incur expenses due
to rating agency fees, higher directors and officers insurance, compliance with
laws relating to corporate governance and public disclosure and audit fees. In
addition, in fiscal year 2004 we began to incur additional costs associated
with developing disclosure controls and procedures and implementing the level
of internal controls required for a company with registered securities. General
and administrative expense has also increased from 2003 to 2005 as a result of
stock option bonus expense to restore the approximate economic position of our
option holders after dividends were paid to our stockholder with the net proceeds
from the issuance of the 2009 Notes and the 2010 Notes. We expect general and
administrative expense to increase in 2006 and in the future due to option
grant related expense as a result of the adoption of FAS 123(R) at the
beginning of 2006 and expense related to options granted in December 2005 that
will be cancelled and replaced with restricted stock upon completion of an
initial public offering that are accounted for using variable accounting to
determine the expense based on the change in the incremental value of the award
at each reporting period.

Results of Operations

Our
operating results for the 13 weeks ended September 30, 2005 and 2006 are
expressed as a percentage of restaurant revenue below:

19

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|                                     |  |  |                             |   |      |       |  
|------------------------------------ |  |  | --------------------------- | - | ---- | ----- | -
|                                     |  |  | 13 Weeks EndedSeptember 30,
|                                     |  |  |                            
|                                     |  |  |                             |   |      |       |  
|                                     |  |  | 2005                        |   | 2006
|                                     |  |  |                             |   |     
|Income Statement Data:               |  |  |                             |   |      |       |  
|Restaurant
  revenue                 |  |  | 100.0                       | % |      | 100.0 | %
|Product cost                         |  |  | 31.9                        |   |      | 31.0  |  
|Payroll and
  benefits               |  |  | 25.1                        |   |      | 25.1  |  
|Depreciation
  and amortization      |  |  | 6.4                         |   |      | 4.2   |  
|Other
  operating expenses           |  |  | 29.2                        |   |      | 32.5  |  
|Operating income                     |  |  | 14.4                        |   |      | 14.7  |  
|Interest
  expense                   |  |  | 8.2                         |   |      | 11.7  |  
|Income before income taxes           |  |  | 6.2                         |   |      | 3.0   |  
|Net income                           |  |  | 3.7                         |   |      | 0.9   |  
|Supplementary Income Statement Data: |  |  |                             |   |      |       |  
|Restaurant
  other operating expense |  |  | 18.4                        |   |      | 21.6  |  
|Franchise
  expense                  |  |  | 1.3                         |   |      | 1.4   |  
|General and
  administrative expense |  |  | 9.5                         |   |      | 9.5   |  
|Total other operating expenses       |  |  | 29.2                        |   |      | 32.5  |  

13 Weeks Ended September 30, 2006
Compared to 13 Weeks Ended September 30, 2005

Restaurant
revenue increased $4.1 million, or 7.2%, to $61.7 million for the 13 weeks
ended September 30, 2006 from $57.5 million for the 13 weeks ended September
30, 2005. This increase was partially due to an additional $1.2 million in
restaurant revenue resulting from a 2.1% increase in company-operated
same-store sales for the 2006 period from the 2005 period. Restaurants enter
the comparable restaurant base for same-store sales the first full week after
that restaurants one-year anniversary. The increase in restaurant revenue also
was due in part to revenues of $1.1 million in fiscal 2006 from three
restaurants opened in fiscal 2005 and $1.9 million from six restaurants opened
in fiscal 2006.

Franchise
revenue increased $0.6 million, or 15.2%, to $4.6 million for the 13 weeks
ended September 30, 2006 from $4.0 million for the 13 weeks ended September 30,
2005. This increase is due to an increase in royalties resulting from a 5.2%
increase in franchise same-store sales and is also due to an increase of $0.3
million in front-end fees recognized in the current period for the opening of
new franchise stores and the execution of new development agreements.

Product
cost increased $0.8 million, or 4.2%, to $19.1 million for the 13 weeks ended
September 30, 2006 from $18.3 million for the 13 weeks ended September 30,
2005. These costs as a percentage of restaurant revenue were 31.0% for the 2006
period compared to 31.9% for the 2005 period. The 0.9% decrease in product cost
as a percentage of restaurant revenue resulted primarily from the chicken meal
restructuring in May 2005 and the menu price increases taken in January and
March of 2006.

Payroll
and benefit expenses increased $1.0 million, or 7.1%, to $15.5 million for the
13 weeks ended September 30, 2006 from $14.4 million for the 13 weeks ended
September 30, 2005. As a percentage of restaurant revenue, these costs remained
flat at 25.1% for the 2006 and 2005 period. This increase is primarily
attributed to increased spending on manager training and increased workers
compensation expense in the current period.

20

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Depreciation
and amortization decreased $1.1 million, or 28.6%, to $2.6 million for the 13
weeks ended September 30, 2006 compared to $3.7 million for the 13 weeks ended
September 30, 2005. These costs as a percentage of restaurant revenue decreased
2.2% to 4.2% in 2006 from 6.4% for the 2005 period. The decrease in
depreciation expense is due to the revaluation of the companys assets that was
completed with the sale of the company to CAC.

Other
operating expenses include restaurant other operating expense, franchise
expense, and general and administrative expense.

Restaurant
other operating expense, which includes utilities, repair and maintenance,
advertising, property taxes, occupancy and other operating expenses, increased
$2.7 million, or 25.7%, to $13.3 million for the 13 weeks ended September 30,
2006 from $10.6 million for the 13 weeks ended September 30, 2005. These costs
as a percentage of restaurant revenue increased 3.2% to 21.6% for the 2006
period from 18.4% for the 2005 period. The increase in operating costs is due
primarily to an increase in occupancy expense of $0.9 million, which is
partially attributed to the revaluation of our leases that was completed with
the sale of the company. The increase is also due to higher utilities of $0.3
million and higher repair and maintenance costs of $0.3 million. Advertising
expense was also $0.8 million higher in the 2006 period. Our advertising
spending in the third quarter of 2006 was 4.2% of sales which was over the
planned annual rate of 4%, compared to the third quarter of 2005 which was 3.2%
of sales, and each quarter may be above or below this planned annual rate,
depending on the timing of marketing promotion and the relative weights and
price of media spending.

Franchise
expense consists primarily of rent expense that we pay to landlords associated
with leases under restaurants we are subleasing to franchisees. This expense
usually fluctuates primarily as subleases expire and to some degree based on
rents that are tied to a percentage of sales calculation. Franchise expense
increased to $0.9 million the 13-week periods ended September 30, 2006 compared
to $0.8 million for the 2005 period.

General
and administrative expense increased $0.4 million, or 7.9%, to $5.9 million for
the 13 weeks ended September 30, 2006 from $5.4 million for the 13 weeks ended
September 30, 2005. General and administrative expense as a percentage of
revenue remained flat at 9.5% for the thirteen weeks ended September 30, 2006
and 2005. The increase was attributed to a gain on the sale of assets in the
2005 period that did not recur in the 2006 period of $0.3 million and increased
meeting fees in the 2006 period due to the leadership conference being held
earlier this year than in 2005, partially offset by decreased legal fees of
$0.2 million.

Interest
expense, net of interest income, increased $2.5 million, or 52.6%, to $7.2
million for the 13 weeks ended September 30, 2006 from $4.7 million for the 13
weeks ended September 30, 2005. Our average debt balances for the 2006 period
increased to $258.4 million compared to $167.7 million for the 2005 period and
our average interest rate increased to 10.78% for the 2006 period compared to
9.99% for the 2005 period.

Our
provision for income taxes consisted of income tax expense of $1.3 million and
$1.5 million for the 13-week periods ended September 30, 2006 and 2005,
respectively, for an effective tax rate of 56.7% for 2006 and 41.0% for
2005.  The 2006 periods effective tax
rate was impacted by the disqualified portion of the original issue discount
related to the 2014 Notes in the amount of $0.5 million.  The limitation on deductibility of interest
is covered under the Applicable High Yield Discount Obligation (AHYDO) rules in
Section 163(i) of the Internal Revenue Code.

As
a result of the factors above, net income was $0.5 million for the 13 weeks
ended September 30, 2006 compared with $3.7 million for the 13 weeks ended
September 30, 2005, or 0.9% and 3.7% as a percentage or restaurant revenue, for
the 13 weeks ended September 30, 2006 and 2005, respectively.

Our
operating results for the 39 weeks ended September 30, 2005 and 2006 are
expressed as a percentage of restaurant revenue below:

21

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|                                     |  |  |                                 |   |      |       |  
|------------------------------------ |  |  | ------------------------------- | - | ---- | ----- | -
|                                     |  |  | 39 Weeks Ended 
  September 30,
|                                     |  |  |                                
|                                     |  |  | 2005                            |   | 2006
|                                     |  |  |                                 |   |     
|Income Statement Data:               |  |  |                                 |   |      |       |  
|Restaurant
  revenue                 |  |  | 100.0                           | % |      | 100.0 | %
|Product cost                         |  |  | 31.7                            |   |      | 31.3  |  
|Payroll and
  benefits               |  |  | 25.6                            |   |      | 25.4  |  
|Depreciation
  and amortization      |  |  | 6.5                             |   |      | 4.1   |  
|Other
  operating expenses           |  |  | 30.9                            |   |      | 32.4  |  
|Operating income                     |  |  | 12.2                            |   |      | 13.9  |  
|Interest
  expense                   |  |  | 8.6                             |   |      | 11.8  |  
|Income before income taxes           |  |  | 3.6                             |   |      | 2.1   |  
|Net income                           |  |  | 2.2                             |   |      | 1.0   |  
|Supplementary Income Statement Data: |  |  |                                 |   |      |       |  
|Restaurant
  other operating expense |  |  | 18.7                            |   |      | 20.8  |  
|Franchise
  expense                  |  |  | 1.4                             |   |      | 1.4   |  
|General and
  administrative expense |  |  | 10.8                            |   |      | 10.2  |  
|Total other operating expenses       |  |  | 30.9                            |   |      | 32.4  |  

39
Weeks Ended September 30, 2006 Compared to 39 Weeks Ended September 30, 2005

Restaurant
revenue increased $16.6 million, or 10.0%, to $182.5 million for the 39 weeks
ended September 30, 2006 from $165.9 million for the 39 weeks ended September
30, 2005. This increase was partially due to an additional $7.4 million in
restaurant revenue resulting from a 4.5% increase in company-operated
same-store sales for the 2006 period from the 2005 period. Restaurants enter
the comparable restaurant base for same-store sales the first full week after
that restaurants one-year anniversary. The increase in restaurant revenue also
was due in part to revenues of $5.3 million in fiscal 2006 from six restaurants
opened in fiscal 2005 and $4.0 million from six restaurants opened in fiscal
2006.

Franchise revenue increased $1.3 million, or 11.4%, to $12.8 million for the 39
weeks ended September 30, 2006 from $11.5 million for the 39 weeks ended
September 30, 2005. This increase is due primarily to an increase in royalties
resulting from a 7.8% increase in franchise same-store sales.

Product cost increased $4.4 million, or 8.5%, to $57.1 million for the 39 weeks
ended September 30, 2006 from $52.7 million for the 39 weeks ended September
30, 2005. These costs as a percentage of restaurant revenue were 31.3% for the
2006 period compared to 31.7% for the 2005 period. The 0.4% decrease in product
cost as a percentage of restaurant revenue resulted primarily from the chicken
meal restructuring in May 2005 and the menu price increases taken in January
and March of 2006.

Payroll and benefit expenses increased $3.8 million, or 8.9%, to $46.3 million
for the 39 weeks ended September 30, 2006 from $42.5 million for the 39 weeks
ended September 30, 2005. As a percentage of restaurant revenue, these costs
decreased 0.2% to 25.4% for the 2006 period from 25.6% for the 2005 period.
This decrease was primarily due to margin leverage from the chicken meal
restructuring in May 2005 and the menu price increases taken in January and
March of 2006 and also in part to labor savings from the implementation of a
labor scheduling guide used to improve labor scheduling and efficiencies.

Depreciation and amortization decreased $3.2 million, or 30.2%, to $7.5 million
for the 39 weeks ended September 30, 2006 compared to $10.7 million for the 39
weeks ended September 30, 2005. These

22

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costs as a
percentage of restaurant revenue decreased 2.4% to 4.1% in 2006 from 6.5% for
the 2005 period. The decrease in depreciation expense is due to the revaluation
of the companys assets that was completed with the sale of the company to CAC.

Other operating expenses include restaurant other operating expense, franchise
expense, and general and administrative expense.

Restaurant other operating expense, which includes utilities, repair and maintenance,
advertising, property taxes, occupancy and other operating expenses, increased
$6.8 million, or 21.9%, to $37.9 million for the 39 weeks ended September 30,
2006 from $31.1 million for the 39 weeks ended September 30, 2005. These costs
as a percentage of restaurant revenue increased 2.1% to 20.8% for the 2006
period from 18.7% for the 2005 period. The increase in operating costs is due
primarily to an increase in occupancy expense of $2.6 million, which is
partially attributed to the revaluation of our leases that was completed with
the sale of the company. The increase is also due to higher utilities of $0.9
million, increased preopening expenses of $0.4 million and higher repair and
maintenance costs of $1.0 million, partially due to fryer maintenance, which
was completed on all company stores in the first quarter of 2006. Credit card
charges and bank fees were also $0.2 million higher due to the higher sales
volume.  Advertising expense was also
$0.6 million higher in the 2006 period due to the higher sales volume.

Franchise expense consists primarily of rent expense that we pay to landlords
associated with leases under restaurants we are subleasing to franchisees. This
expense usually fluctuates primarily as subleases expire and to some degree
based on rents that are tied to a percentage of sales calculation. Franchise
expense increased to $2.6 million the 39-week periods ended September 30, 2006
compared to $2.3 million for the 2005 period.

General and administrative expense increased to $18.6 million for the 39 weeks
ended September 30, 2006 compared to $17.9 million for the 39 weeks ended
September 30, 2005. General and administrative expense as a percentage of
revenue was 10.2% and 10.8% for the 39 weeks ended September 30, 2006 and 2005,
respectively. General and administrative expense decreased as a percentage of
revenue due to the increased revenues in the 2006 period as compared to the
comparable 2005 period. The increase in general and administrative is
attributed to a gain on sale of assets of $0.4 million that occurred in the
2005 period, increased salaries and wages expense of $0.9 million primarily due
to increased headcount, increased travel and entertainment expenses of $0.3
million, increased meeting expenses of $0.2 million, increased legal fees of
$0.1 million, increased management fees of $0.1 million and an increase in
closed store reserve expense of $0.1 million. The increase was also due to an
expense of $0.3 million due to unvested options granted in December 2005 that
will be cancelled and replaced with restricted stock upon completion of an
initial public offering accounted for using variable accounting, which requires
us to recognize expense based on the change in the incremental value of the
award at each accounting period.  This
increase was partially offset by a decrease in bonus expense of $0.8 million,
an asset impairment charge in the 2005 period that did not recur in the 2006
period of $1.1 million and bonus expense related to the revaluation of stock
options of $0.4 million that did not recur in the 2006 period.

Interest expense, net of interest income, increased $7.2 million, or 50.6%, to
$21.4 million for the 39 weeks ended September 30, 2006 from $14.2 million for
the 39 weeks ended September 30, 2005. Our average debt balances for the 2006
period increased to $259.0 million compared to $167.9 million for the 2005
period and our average interest rate increased to 10.62% for the 2006 period
compared to 9.94% for the 2005 period.

Our provision for income taxes consisted of income tax expense of $2.1 million
and $2.3 million for the 39-week periods ended September 30, 2006 and 2005,
respectively, for an effective tax rate of 48.7% for 2006 and 41.0% for 2005.  The 2006 periods effective tax rate was
impacted by the disqualified portion of the original issue discount related
to the EPL Intermediate Discount Notes in the amount of $0.5 million.  The limitation on deductibility of interest
is covered under the Applicable High Yield Discount Obligation (AHYDO) rules in
Section 163(i) of the Internal Revenue Code.

As a result of the factors above, net income decreased $1.9 million to $1.8
million for the 39 weeks ended September 30, 2006 from $3.7 million for the 39
weeks ended September 30, 2005, or 1.0% and 2.2% as a
percentage or restaurant revenue, for the 39 weeks ended September 30, 2006 and
2005, respectively.

23

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Liquidity and Capital Resources

Our
principal liquidity requirements are to service our debt and meet our capital
expenditure needs. Our indebtedness at September 30, 2006 was $258.6 million.
Our ability to make payments on and to refinance our indebtedness, and to fund
planned capital expenditures will depend on our ability to generate cash in the
future, which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our
control. Based on our current level of operations, we believe our cash flow
from operations, available cash and available borrowings under the $25.0
million revolving portion of EPLs senior credit facility will be adequate to
meet our future liquidity needs for the foreseeable future.

Cash
and cash equivalents increased $3.8 million from $3.6 million at December 28,
2005 to $7.4 million at September 30, 2006. In the first nine months of fiscal
2006, we made $0.8 million in principal repayments on EPLs loan and $2.8
million in payments to pay off borrowings under our revolving credit facility.
We cannot assure you that our business will generate sufficient cash flow from
operations or that future borrowings will be available to us under EPLs senior
credit facility in an amount sufficient to enable us to service our
indebtedness or to fund our other liquidity needs. If we acquire restaurants
from franchisees, our debt service requirements could increase. In addition, we
may fund restaurant openings through credit received by trade suppliers and
landlord contributions. If our cash flow from operations is inadequate to meet
our obligations under our indebtedness we may need to refinance all or a
portion of our indebtedness, including the 2013 Notes and the 2014 Notes, on or
before maturity. We cannot assure you that we will be able to refinance any of
our indebtedness on commercially reasonable terms or at all.

As
a holding company, the capital stock of EPL constitutes our only material
asset. Consequently, EPL conducts all of our consolidated operations and owns
substantially all of our consolidated operating assets. Our principal source of
the cash required to pay our obligations is the cash that EPL generates from
its operations. EPL is a separate and distinct legal entity and has no
obligation to make funds available to us and currently has restrictions that
limit distributions or dividends to be paid by EPL to us. Furthermore, subject
to certain restrictions, EPL is permitted under the terms of EPLs senior
secured credit facilities and the indenture governing the 2013 Notes and 2014
Notes to incur additional indebtedness that may severely restrict or prohibit
the making of distributions, the payment of dividends or the making of loans by
EPL.

Working
Capital and Cash Flows

We
presently have, in the past have had, and may have in the future, negative
working capital balances. The working capital deficit principally is the result
of our investment to build new restaurants, remodel and replace or improve
equipment in company-operated restaurants, and to acquire new restaurant
information systems. We do not have significant receivables or inventories and
we receive trade credit based upon negotiated terms in purchasing food and
supplies. Funds available from cash sales and franchise revenue not needed
immediately to pay for food and supplies or to finance receivables or
inventories typically have been used for the capital expenditures referenced
above and/or debt service payments under our existing indebtedness. As
discussed above we spent cash on a number of items directly or indirectly
related to our debt financings.

Operating
Activities.We had net cash provided by operating
activities of $21.8 million for the 39 weeks ended September 30, 2006 compared
with net cash provided by operating activities of $27.1 million for the 39
weeks ended September 30, 2005. The decrease in cash provided by operating
activities of $5.3 million in the 2006 period compared to the 2005 period was
primarily attributable to decreased depreciation and amortization of assets of
$3.2 million due to the revaluation that was completed with the sale of the
company, an asset impairment charge that did not recur in the 2006 period of
$1.1 million, a decrease in interest accretion of $1.3 million and a decrease
in net income of $1.9 million.

Investing
Activities.We had net cash used in investing
activities of $11.9 million for the 39 weeks ended September 30, 2006 compared
with $9.9 million for the 39 weeks ended September 30, 2005. The increase in
cash used in investing activities of $2.0 million was related to $2.9 million
in acquisition costs paid in the 2006 period and $1.4 million in proceeds from
disposition of assets in 2005 that did not recur in 2006 partially offset by
decreased spending in expenditures for new store construction of $1.2 million.

24

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Financing
Activities.We had net cash used in financing
activities of $6.0 million for the 39 weeks ended September 30, 2006 compared
with net cash used in financing activities of $8.8 million for the 39 weeks
ended September 30, 2005. The decrease in cash used in financing activities in
the 2006 period was attributable to decreased principal payments of our new
term loan, partially offset by a $2.8 million payment of our revolver and $1.6
million in deferred financing costs paid in the 2006 period.

Debt
and Other Obligations

On
November 18, 2005, EPL entered into senior secured credit facilities with EPLI,
as parent guarantor, Merrill Lynch Capital Corporation, as administrative
agent, the other agents identified therein, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, N.A., as
lead arrangers and book managers, and a syndicate of financial institutions and
institutional lenders. The senior secured credit facilities provide for an
$104.5 million term loan and $25.0 million in revolving availability. Of this
senior secured revolving credit facility, EPL drew down $2.8 million and issued
$8.1 million of letters of credit to replace existing letters of credit.

At
December 28, 2005, certain secured loans, which were assumed in connection with
purchases of restaurants from franchisees, were fully repaid.

We
have certain land and building leases for which the building portion is treated
as a capital lease. These assets are amortized over the life of the respective
lease.

In
October 2005, we commenced a tender offer to purchase for cash any and all
outstanding 2009 Notes and 2010 Notes and solicited consents to amend the
indentures governing the 2009 and 2010 Notes to eliminate substantially all of
the restrictive covenants and certain events of default and modify other
provisions contained in such indentures. As of September 30, 2006, all of the
2010 Notes have been purchased for cash, and all except for $250,000 in
aggregate principal amount of the 2009 Notes have been purchased for cash. In
connection therewith, substantially all of the restrictive covenants and events
of default in the related indentures have been eliminated.

On
November 18, 2005, Intermediate Finance issued $39.3 million aggregate
principal amount at maturity of 14 1/2% senior discount notes due 2014.
Intermediate Finance merged with and into EPLI, with EPLI surviving the merger
and assuming Intermediate Finances obligations under the notes and the related
indenture. On November 18, 2005, EPL Finance issued $125.0 million aggregate
principal amount of 11 3/4% senior notes due 2013. The 2013 Notes are
guaranteed by EPLI. EPL Finance merged with and into EPL, with EPL surviving
the merger and assuming EPL Finances obligations under the 2013 Notes and the
related indenture.

On
May 15, 2006, the Company commenced a tender offer to purchase for cash all of
the outstanding 2013 Notes and 2014 Notes and we solicited consents to amend
the indenture governing the 2013 Notes and the 2014 Notes to remove
substantially all of the restrictive covenants and certain events of default
and modify other provisions contained in such indenture. The tender offer and
consent solicitation for the 2013 Notes and the 2014 Notes were conditioned
upon the completion of the initial public offering. On October 12, 2006, we filed a
letter of withdrawal with the SEC effectively withdrawing our intended IPO.
Concurrently, we withdrew our tender offer for the 2013 and 2014 bonds.

At
September 30, 2006, we had $25.4 million outstanding in aggregate principal
amount of the 2014 Notes. No cash interest will accrue on the 2014 Notes prior
to November 15, 2009. Instead, the principal value of the 2014 Notes will
increase (representing accretion of original issue discount) from the date of
original issuance until but not including November 15, 2009 at a rate of 14
1/2% per annum compounded annually, so that the accreted value of the 2014
Notes on November 15, 2009 will be equal to the full principal amount of $39.3
million at maturity. Beginning on November 15, 2009, cash interest will accrue

25

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on the 2014
Notes at an annual rate of 14 1/2% per annum payable semi-annually in arrears
on May 15 and November 15 of each year, beginning May 15, 2010. Principal is
due on November 15, 2014.

At
September 30, 2006, we had outstanding letters of credit totaling $7.4 million,
which served as collateral for our various workers compensation insurance
programs.

Franchisees
pay a monthly advertising fee of 4% of gross sales for the Los Angeles
designated market area or 5% of gross sales for other markets. Pursuant to our
Uniform Franchise Offering Circular, we contribute, where we have
company-operated restaurants, to the advertising fund on the same basis as
franchised restaurants. Under our franchise agreements, we are obligated to use
all advertising fees collected from franchisees to purchase, develop and engage
in advertising, public relations and marketing activities to promote the El
Pollo Loco brand. At September 30, 2006, the Company recorded a liability for
unused advertising fees collected from franchisees of $1.1 million and has a
corresponding $1.1 million obligation to contribute to the advertising fund for
company-operated restaurants.

We
accrued in December 2003 and paid option holders in January 2004 $1.9 million
in bonuses. We made cash payments of $0.6 million in March 2005 related to the
revaluation of stock options in connection with the 2009 and 2010 Notes. We
paid an additional $0.5 million in November 2005 as a result of the Stock
Purchase Agreement (the Stock Purchase Agreement), dated as of September 27,
2005, among us, Chicken Acquisition Corp., Holdings, EPL, the stockholders of Holdings
parties thereto, and American Securities Capital Partners, L.P.

In
connection with the issuance of the 2010 Notes in March 2004 and the dividend
paid by Holdings shortly thereafter, the exercise prices of outstanding options
to purchase shares of the common stock of Holdings were adjusted. We accrued
and paid option holders in April 2004 $1.3 million in bonuses. Also, in fiscal
2004, we accrued $0.5 million in bonuses that we paid in the first quarter of
2005. We paid an additional $0.5 million in November 2005 as a result of the
Stock Purchase Agreement.

As
of September 30, 2006, EPL was in compliance with all of the financial
covenants contained in its senior credit facility. As of such date we
calculated all relevant ratios under EPLs senior credit facility as follows:

| |   |                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------
| |  | EPLs
  consolidated fixed charge coverage ratio (as such term is defined in the
  senior credit agreement) was 1.13 to 1; and
| |   |                                                                                                                                 
| |  | EPLs
  consolidated leverage ratio (as such term is defined in the senior credit
  agreement) was 5.14 to 1.                 

These
two ratios were permitted to be no less than 1.00 to 1, and no greater than
6.00 to 1, respectively, as of such date.

In
addition, as September 30, 2006, we calculated our fixed charge coverage
ratio and our consolidated leverage ratio (as such terms are defined in the
indenture governing the 2014 Notes) at 1.51 to 1 and 5.98 to 1, respectively.
Similar ratios exist in the indenture governing the 2013 Notes. The indenture
permits us to incur indebtedness that (a) is contractually subordinated to the
2014 Notes, (b) has a maturity date after November 15, 2014, and (c) does not
provide for payment of cash interest prior to November 15, 2014. The indenture
also permits our restricted subsidiaries (as such term is defined in the
indenture), including EPL, to incur indebtedness if our fixed charge coverage
ratio for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
indebtedness was incurred would have been at least 2.0 to 1, and, in the case
of indebtedness incurred by us, if our consolidated leverage ratio would have
been equal to or less than 7.5 to 1, all as determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom), as if such indebtedness
had been incurred at the beginning of such four-quarter period. Since EPL does
not currently meet the fixed charge coverage ratio, EPL is not permitted to
incur additional indebtedness.

26

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Critical Accounting Policies and Estimates

The
preparation of our financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, we evaluate our estimates and judgments,
including those related to recoverability of fixed assets, intangible assets,
closed restaurants, workers compensation insurance and contingent liabilities.
We base our estimates and judgments on historical experience and on various
other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. A summary of our critical accounting polices and estimates is
included in our Annual Report on Form 10-K (File No. 333-115644) as filed with
the Securities and Exchange Commission on April 10, 2006.

Initial Public Offering

On
May 8, 2006, the parent of EPLI, El Pollo Loco Holdings, Inc., filed a
registration statement with the Securities and Exchange Commission for an
initial public offering of approximately $135 million of common stock. On
October 12, 2006, El Pollo Loco Holdings, Inc. withdrew its registration
statement on Form S-1 as current market conditions made it inadvisable to
proceed with the offering at that time. No shares of common stock of Holdings
were issued or sold under the registration statement.

Item 3. Quantitative and Qualitative Disclosures
About Market Risk

The
inherent risk in market risk sensitive instruments and positions primarily
relates to potential losses arising from adverse changes in interest rates.

We
are subject to market risk from exposure to changes in interest rates based on
our financing activities. This exposure relates to interest on our senior
credit facility that is payable at a fixed base rate of 3% plus a variable
component based on LIBOR.

A
hypothetical 10% fluctuation in the variable interest rate on our existing debt
of $104.5 million as of December 28, 2005 would result in an increase or
decrease in interest expense of approximately $0.5 million in a given year. We
do not consider the change in fair value of our long-term fixed rate debt
resulting from a hypothetical 10% fluctuation in interest rates as of September
30, 2006 to be material.

Item 4. Controls and Procedures

We
maintain disclosure controls and procedures (as defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) that are designed to ensure that information that would be
required to be disclosed in Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the Commissions
rules and forms, and that such information is accumulated and communicated to
our management, including the principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to apply
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures.

As
of September 30, 2006, the end of the period covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
management, including the principal executive officer and principal financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on the foregoing, our principal executive
officer and principal financial officer concluded that our disclosure controls
and procedures were effective.

There
have been no changes in our internal control over financial reporting that have
materially affected or that are reasonably likely to materially affect our
internal control over financial reporting.

27

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PART II  OTHER INFORMATION

Item 1. Legal Proceedings

On
June 22, 2006, we filed a complaint for declaratory relief, breach of written
contract and bad faith against Arch Specialty Insurance Company, seeking
damages and equitable relief for Archs refusal to carry out the obligations of
its insurance contract to defend and indemnify, among other things, EPL in the
EPL-Mexico v. EPL-USA trademark litigation referenced above. No responsive
pleading has yet been filed by Arch in this case.

Also
see our Annual Report on Form 10-K for the year ended December 28, 2005 as
filed with the SEC on April 10, 2006.

Item 1A. Risk Factors

Certain
factors may have a material adverse effect on our business, financial condition
and results of operations and you should carefully consider them. For
discussion of our potential risks our uncertainties, refer to Risk Factors,
included in our Annual Report on Form 10-K for the year ended December 28, 2005
as filed with the U.S. Securities Exchange Commission on April 10, 2006.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

None.

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.

|                 |  |                                                                                                           
|---------------- |  | ----------------------------------------------------------------------------------------------------------
|Exhibit
  Number |  | Description
  of Documents                                                                                
|                 |  |                                                                                                           
|                 |  |                                                                                                           
|31.1             |  | Certification
  of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002
|                 |  |                                                                                                           
|31.2             |  | Certification
  of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002
|                 |  |                                                                                                           
|32.1             |  | Certification
  of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002
|                 |  |                                                                                                           
|32.2             |  | Certification
  of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002

28

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SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                        |                         |                              | 
|----------------------- | ----------------------- | ---------------------------- | 
|                        | EPL
  INTERMEDIATE, INC
|                        |                         |                              | 
|Date: November 13, 2006 | By:                     | /s/
  Stephen E. Carley      | 
|                        |                         |                              | 
|                        |                         | Stephen
  E. Carley          | 
|                        |                         | President                    | 
|                        |                         |                              | 
|                        | By:                     | /s/
  Joseph Stein           | 
|                        |                         |                              | 
|                        |                         | Joseph
  Stein               | 
|                        |                         | Vice President and Treasurer | 

29

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EXHIBIT INDEX

|        |  |                                                                                                         
|------- |  | --------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                         
|Number  |  | Description
  of Documents                                                                              
|        |  |                                                                                                         
|        |  |                                                                                                         
|31.1    |  | Certification of Principal
  Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                         
|31.2    |  | Certification of Principal
  Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                         
|32.1    |  | Certification of Principal
  Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                         
|32.2    |  | Certification of Principal
  Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

30

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