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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 June 28, 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
  (State or Other Jurisdiction of
  Incorporation or Organization) |  | 13-4092105
  (I.R.S. Employer
  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. Yesx   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 August
14, 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)                               | 3   
|2.                |  | Managements
  Discussion and Analysis of Financial Condition and Results of Operations | 18  
|3.                |  | Quantitative
  and Qualitative Disclosures About Market Risk                            | 27  
|4.                |  | Controls
  and Procedures                                                               | 27  
|                  |  |                                                                                         |     
|                  |  | PART II  OTHER INFORMATION                                                             |     
|1.                |  | Legal
  Proceedings                                                                     | 28  
|1A.               |  | Risk
  Factors                                                                          | 28  
|2.                |  | Unregistered
  Sales of Equity Securities and Use of Proceeds                           | 28  
|3.                |  | Defaults
  Upon Senior Securities                                                       | 28  
|4.                |  | Submission
  of Matters to a Vote of Security Holders                                   | 28  
|5.                |  | Other
  Information                                                                     | 28  
|6.                |  | Exhibits                                                                                | 29  

2

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

|                                          |  |                  |         |              |   |         | 
|----------------------------------------- |  | ---------------- | ------- | ------------ | - | ------- | 
|                                          |  | DECEMBER 28,2005 |         | JUNE 30,2006 |  
|                                          |  |                  |         |              |  
|ASSETS                                    |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|CURRENT ASSETS:                           |  |                  |         |              |   |         | 
|Cash and cash equivalents                 |  | $                | 3,552   |              | $ | 1,678   | 
|Notes and accounts
receivablenet         |  |                  | 2,998   |              |   | 3,750   | 
|Inventories                               |  |                  | 1,372   |              |   | 1,349   | 
|Prepaid expenses and other current
assets |  |                  | 3,189   |              |   | 4,034   | 
|Income taxes receivable                   |  |                  | 3,825   |              |   | 1,231   | 
|Deferred income taxes                     |  |                  | 1,520   |              |   | 1,520   | 
|                                          |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|Total current assets                      |  |                  | 16,456  |              |   | 13,562  | 
|                                          |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|PROPERTY OWNEDNet                        |  |                  | 69,121  |              |   | 68,948  | 
|                                          |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|PROPERTY HELD
  UNDER CAPITAL LEASESNet  |  |                  | 2,186   |              |   | 1,911   | 
|                                          |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|GOODWILL                                  |  |                  | 272,204 |              |   | 278,264 | 
|                                          |  |                  |         |              |   |         | 
|DOMESTIC
  TRADEMARKSNet                 |  |                  | 120,700 |              |   | 120,700 | 
|                                          |  |                  |         |              |   |         | 
|OTHER INTANGIBLE
  ASSETSNet             |  |                  | 13,698  |              |   | 12,820  | 
|                                          |  |                  |         |              |   |         | 
|OTHER ASSETS                              |  |                  | 11,554  |              |   | 12,004  | 
|                                          |  |                  |         |              |   |         | 
|                                          |  |                  |         |              |   |         | 
|TOTAL ASSETS                              |  | $                | 505,919 |              | $ | 508,209 | 
|                                          |  |                  |         |              |   |         | 

|                                                            |            
|----------------------------------------------------------- | -----------
|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, |         | JUNE 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   |          |   | 1,230   | 
|Accounts payable                                                                           |  |                | 10,215  |          |   | 10,104  | 
|Accrued salaries                                                                           |  |                | 4,184   |          |   | 2,886   | 
|Accrued vacation                                                                           |  |                | 1,728   |          |   | 1,817   | 
|Accrued insurance                                                                          |  |                | 3,539   |          |   | 3,583   | 
|Accrued interest                                                                           |  |                | 2,631   |          |   | 2,627   | 
|Accrued advertising                                                                        |  |                | 911     |          |   | 1,440   | 
|Other accrued expenses and current
  liabilities                                           |  |                | 3,683   |          |   | 3,691   | 
|Amounts due to predecessor stockholders                                                    |  |                |        |          |   | 3,825   | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|Total current liabilities                                                                  |  |                | 31,975  |          |   | 32,248  | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|NONCURRENT
  LIABILITIES:                                                                  |  |                |         |          |   |         | 
|Senior
        secured notes (2009 Notes)                                                  |  |                | 250     |          |   | 250     | 
|Senior
        unsecured notes (2013 Notes)                                                |  |                | 123,425 |          |   | 123,548 | 
|Discount
        notes (2014 Notes)                                                        |  |                | 22,889  |          |   | 24,540  | 
|Note payableless current portion                                                          |  |                | 103,455 |          |   | 102,933 | 
|Obligations under capital leasesless
  current portion                                    |  |                | 5,211   |          |   | 4,655   | 
|Deferred income taxes                                                                      |  |                | 34,383  |          |   | 34,324  | 
|Other intangible liabilitiesnet                                                           |  |                | 9,037   |          |   | 8,168   | 
|Other noncurrent liabilities                                                               |  |                | 3,603   |          |   | 4,247   | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|Total noncurrent liabilities                                                               |  |                | 302,253 |          |   | 302,665 | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|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 |          |   | 172,628 | 
|Retained earnings / (accumulated deficit)                                                  |  |                | (588    | )        |   | 668     | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|Total stockholders equity                                                                 |  |                | 171,691 |          |   | 173,296 | 
|                                                                                           |  |                |         |          |   |         | 
|                                                                                           |  |                |         |          |   |         | 
|TOTAL                                                                                      |  | $              | 505,919 |          | $ | 508,209 | 
|                                                                                           |  |                |         |          |   |         | 

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

4

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|                                                           
|-----------------------------------------------------------
|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 June 30, |        | 26 Weeks
  Ended June 30, |  
|                                           |  | Predecessor               |        | Successor                 |   | Predecessor |  | Successor |        
|                                           |  | 2005                      |        | 2006                      |   | 2005        |  | 2006      |        
|                                           |  |                           |        |                           |   |             |  |           |        
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|OPERATING
  REVENUE:                       |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|Restaurant revenue                         |  | $                         | 57,176 |                           | $ | 61,678      |  | $         | 108,335 |  | $ | 120,829 | 
|Franchise revenue                          |  |                           | 3,990  |                           |   | 4,180       |  |           | 7,501   |  |   | 8,197   | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|Total operating revenue                    |  |                           | 61,166 |                           |   | 65,858      |  |           | 115,836 |  |   | 129,026 | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|OPERATING
  EXPENSES:                      |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|Product cost                               |  |                           | 18,089 |                           |   | 19,043      |  |           | 34,302  |  |   | 38,008  | 
|Payroll and benefits                       |  |                           | 14,521 |                           |   | 15,873      |  |           | 28,094  |  |   | 30,838  | 
|Depreciation and amortization              |  |                           | 3,595  |                           |   | 2,504       |  |           | 7,077   |  |   | 4,880   | 
|Other operating expenses                   |  |                           | 17,990 |                           |   | 19,299      |  |           | 34,462  |  |   | 39,027  | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|Total operating expenses                   |  |                           | 54,195 |                           |   | 56,719      |  |           | 103,935 |  |   | 112,753 | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|OPERATING
  INCOME                         |  |                           | 6,971  |                           |   | 9,139       |  |           | 11,901  |  |   | 16,273  | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|INTEREST
  EXPENSENet                     |  |                           | 4,765  |                           |   | 7,099       |  |           | 9,501   |  |   | 14,218  | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|INCOME
  BEFORE PROVISION FOR INCOME TAXES |  |                           | 2,206  |                           |   | 2,040       |  |           | 2,400   |  |   | 2,055   | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|PROVISION
  FOR INCOME TAXES               |  |                           | 760    |                           |   | 793         |  |           | 839     |  |   | 799     | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 
|NET INCOME                                 |  | $                         | 1,446  |                           | $ | 1,247       |  | $         | 1,561   |  | $ | 1,256   | 
|                                           |  |                           |        |                           |   |             |  |           |         |  |   |         | 

See notes to condensed
consolidated financial statements.

5

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

|                                                                                    |  |                         |        |           |   |        |  
|----------------------------------------------------------------------------------- |  | ----------------------- | ------ | --------- | - | ------ | -
|                                                                                    |  | 26 Weeks Ended June 30, |       
|                                                                                    |  | Predecessor             |        | Successor |  
|                                                                                    |  | 2005                    |        | 2006      |  
|                                                                                    |  |                         |        |           |  
|                                                                                    |  |                         |        |           |   |        |  
|CASH
  FLOWS FROM OPERATING ACTIVITIES:                                             |  |                         |        |           |   |        |  
|Net income                                                                          |  | $                       | 1,561  |           | $ | 1,256  |  
|Adjustments to reconcile net income to
net cash provided
  by operating activities: |  |                         |        |           |   |        |  
|Depreciation and amortization of
property and intangible
  assets                   |  |                         | 7,077  |           |   | 4,880  |  
|Stock-based compensation
expense                                                    |  |                         |       |           |   | 321    |  
|Interest accretion                                                                  |  |                         | 2,584  |           |   | 1,774  |  
|Gain on disposal of assets                                                          |  |                         | (143   | )         |   |       |  
|Asset impairment                                                                    |  |                         | 1,047  |           |   |       |  
|Amortization of deferred financing
costs                                            |  |                         | 813    |           |   | 653    |  
|Amortization of leasehold
interest                                                  |  |                         | (748   | )         |   | (219   | )
|Deferred income taxes                                                               |  |                         |       |           |   | (59    | )
|Changes in operating assets and
liabilities:                                        |  |                         |        |           |   |        |  
|Notes and accounts
receivablenet                                                   |  |                         | (342   | )         |   | (752   | )
|Inventories                                                                         |  |                         | 32     |           |   | 23     |  
|Prepaid expenses and other current
assets                                           |  |                         | (475   | )         |   | (845   | )
|Income taxes receivable /
payable                                                   |  |                         | 837    |           |   | 2,594  |  
|Other assets                                                                        |  |                         | (183   | )         |   | 82     |  
|Accounts payable                                                                    |  |                         | 1,290  |           |   | 195    |  
|Accrued salaries and vacation                                                       |  |                         | (715   | )         |   | (1,209 | )
|Accrued insurance                                                                   |  |                         | 94     |           |   | 44     |  
|Other accrued expenses and current and
noncurrent
  liabilities                     |  |                         | 1,194  |           |   | 1,177  |  
|                                                                                    |  |                         |        |           |   |        |  
|                                                                                    |  |                         |        |           |   |        |  
|Net cash provided by operating
activities                                           |  |                         | 13,923 |           |   | 9,915  |  
|                                                                                    |  |                         |        |           |   |        |  
|                                                                                    |  |                         |        |           |   |        |  
|CASH FLOW FROM INVESTING
  ACTIVITIES:                                              |  |                         |        |           |   |        |  
|Proceeds from asset
disposition                                                     |  |                         | 483    |           |   |       |  
|Purchase of other assets                                                            |  |                         | (1,086 | )         |   |        |  
|Purchase of property                                                                |  |                         | (6,295 | )         |   | (4,713 | )
|Payment of acquisition costs                                                        |  |                         |       |           |   | (2,022 | )
|                                                                                    |  |                         |        |           |   |        |  
|                                                                                    |  |                         |        |           |   |        |  
|Net cash used in investing
activities                                               |  |                         | (6,898 | )         |   | (6,735 | )
|                                                                                    |  |                         |        |           |   |        |  
|                                                                                    |  |                         |        |           |   |        |  
|CASH FLOWS FROM FINANCING
  ACTIVITIES:                                             |  |                         |        |           |   |        |  
|Proceeds from issuance of common
stock                                              |  |                         |        |           |   | 28     |  
|Payment of obligations under capital
leases                                         |  |                         | (653   | )         |   | (590   | )
|Payments on debt                                                                    |  |                         | (2,697 | )         |   | (3,297 | )
|Payment of deferred financing
costs                                                 |  |                         | (4     | )         |   | (1,195 | )
|                                                                                    |  |                         |        |           |   |        |  
|                                                                                    |  |                         |        |           |   |        |  
|Net cash used in financing
activities                                               |  |                         | (3,354 | )         |   | (5,054 | )
|                                                                                    |  |                         |        |           |   |        |  

|                                                            |            
|----------------------------------------------------------- | -----------
|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)

---

|                                                                                     |  | 26 Weeks
  Ended June 30, |      
|------------------------------------------------------------------------------------ |  | ------------------------- | -----
|                                                                                     |  | Predecessor               |      
|                                                                                     |  | 2005                      |      
|                                                                                     |  |                           |      
|                                                                                     |  |                           |      
|(DECREASE) INCREASE IN CASH AND CASH
  EQUIVALENTS                                   |  | $                         | 3,671
|                                                                                     |  |                           |      
|CASH AND CASH EQUIVALENTS                                                           |  |                           |      
|Beginning of period                                                                  |  |                           | 5,636
|                                                                                     |  |                           |      
|                                                                                     |  |                           |      
|CASH AND CASH EQUIVALENTS                                                           |  |                           |      
|End of period                                                                        |  | $                         | 9,307
|                                                                                     |  |                           |      
|                                                                                     |  |                           |      
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATIONCash paid during the period for:  |  |                           |      
|Interest (net of amounts
capitalized)                                                |  | $                         | 5,509
|                                                                                     |  |                           |      
|                                                                                     |  |                           |      
|Income taxes                                                                         |  | $                         |     
|                                                                                     |  |                           |      
|                                                                                     |  |                           |      
|SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
  ACTIVITIES:                            |  |                           |      
|Unpaid purchases of property and
equipment                                           |  | $                         | 624  
|                                                                                     |  |                           |      
|Recording of amounts due to predecessor
  stockholders in connection with acquistion |  | $                         |     
|                                                                                     |  |                           |      

|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. (collectively, 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 June 29, 2005 and June 28, 2006 as June 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, El Pollo Loco, Inc. (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, Intermediate, 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.

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.

8

---



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
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 113/4% 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.                                                                                                                                                                               

9

---



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 91/4% Senior Secured Notes due 2009 (the 2009
  Notes), and EPLI commenced a tender offer to purchase for cash any and all
  outstanding 121/2% 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 June 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 141/2% Senior Discount Notes due 2014
  (the 2014 Notes). 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
  Corp., a Delaware corporation (EPL Finance), issued $125,000,000 aggregate
  principal amount at maturity of 113/4% 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 June 30, 2006, options to purchase 292,866 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

10

---



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.

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 26 weeks ended June 30, 2006 was $43.59 per share using the Black-Scholes
model with the following weighted-average assumptions used to value the option
grants:

|                         |  |                              
|------------------------ |  | -----------------------------
|                         |  | 26 weeks
  endedJune 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 26 weeks ended June 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 26 weeks ended June
30, 2006, the Company recognized share-based compensation expense before tax of
$29,000 and $56,000, 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
$17,000 and $34,000 during the 13 weeks and 26 weeks ended June 30, 2006,
respectively.

11

---



Upon
consummation of an 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.
For the thirteen and twenty six weeks ended June 30, 2006, compensation expense
of $0 and $265,000, respectively, was recognized, which caused a decrease to
net income of $0, and $162,000, respectively. 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 June 30, 2006, there was approximately $4.1 million of total unrecognized
compensation cost related to nonvested options, which is expected to be
recognized over a remaining vesting period of approximately 6.5 years or
earlier upon the successful completion of an initial public offering of the
Companys common stock.

Changes in
stock options for the 26 weeks ended June 30, 2006 are as follows:

|                                                           |  |        |         |                                    |   |                        |  |  |        | 
|---------------------------------------------------------- |  | ------ | ------- | ---------------------------------- | - | ---------------------- |  |  | ------ | 
|                                                           |  | Shares |         | Weighted-Average 
  Exercise 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                                                  |  |        | (2,225  | )                                  | $ | 86.43                  |  |  |        | 
|                                                          
|                                                           |  |        |         |                                    |   |                        |  |  |        | 
|OutstandingJune
  30, 2006                                |  |        | 292,866 |                                    | $ | 64.80                  |  |  | 81,540 | 
|                                                           |  |        |         |                                    |   |                        |  |  |        | 

12

---



Outstanding
stock options at June 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  |                                                                   |  | 3.88                                 |  | $                    | 2.98  |                                      |  | 17,694 |  | $ | 2.98  | 
|$7.56                      |  |                      | 24,026  |                                                                   |  | 5.04                                 |  | $                    | 7.56  |                                      |  | 24,026 |  | $ | 7.56  | 
|$9.68-$11.77               |  |                      | 33,074  |                                                                   |  | 6.44                                 |  | $                    | 10.67 |                                      |  | 33,074 |  | $ | 10.67 | 
|$15.48-$20.60              |  |                      | 6,746   |                                                                   |  | 8.60                                 |  | $                    | 18.59 |                                      |  | 6,746  |  | $ | 18.59 | 
|$86.43                     |  |                      | 211,326 |                                                                   |  | 9.70                                 |  | $                    | 86.43 |                                      |  |       |  | $ |      | 
|                           |  |                      |         |                                                                   |  |                                      |  |                      |       |                                      |  |        |  |   |       | 
|                           |  |                      | 292,866 |                                                                   |  | 8.50                                 |  | $                    | 64.80 |                                      |  | 81,540 |  | $ | 8.74  | 
|                          
|                           |  |                      |         |                                                                   |  |                                      |  |                      |       |                                      |  |        |  |   |       | 

The
weighted average remaining contractual life for options exercisable as of June
30, 2006 was 5.4 years.

The
aggregate intrinsic value of options outstanding and options exercisable as of
June 30, 2006 was $17.3 million and $9.4 million, respectively. The intrinsic
value is calculated as the difference between the market value as of June 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. 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. 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.

13

---



On
June 14, 2005, the American Disability Institute, a non-profit
Pennsylvania corporation, on behalf of itself and all others similarly
situated, Orlando Hardy, Jr. and Joann Montes, filed a purported class action
complaint against EPL in the United States District Court, Central District of
California, Western Division. This action alleged violations of the Americans
With Disabilities Act of 1990, the Unruh Civil Rights Act in California and the
California Disabled Persons Act, based on, among other things, denying
plaintiffs full and equal access and accommodations to our facilities.
Plaintiffs requested remedies included certification of the class, injunctive
relief, statutory damages and reasonable attorneys fees and costs. The parties
entered into a confidential settlement agreement dated February 1, 2006,
which agreement provided, among other things, for a lump sum payment to the
plaintiffs. The amounts related to the settlement were accrued as of December
28, 2005, which related to the period in which the settlement was determined to
be both probable and estimable. The accrual was not material to the Companys
results of operations and was adequate to provide for the lump sum payment to
the plaintiffs.

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 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.

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 June 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.
SunTrust continues to be the issuing bank with respect to certain of the
Companys letters of credit totaling $37,000.

7. Senior Unsecured Notes Payable

14

---



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.

EPL incurred
direct costs in connection with this offering. 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 we 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 are conditioned upon the completion of the
initial public offering. (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 Company. 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 June 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 June
30, 2006 are as follows (in thousands).

|                                |  |   |         | 
|------------------------------- |  | - | ------- | 
|Year Ending
  December 31       |  |   |         | 
|                                |  |   |         | 
|2006 (July 1st  December 31st) |  | $ | 523     | 
|2007                            |  |   | 1,045   | 
|2008                            |  |   | 1,045   | 
|2009                            |  |   | 1,045   | 
|2010                            |  |   | 1,045   | 
|Thereafter                      |  |   | 99,275  | 
|                                |  |   |         | 
|                                |  | $ | 103,978 | 
|                                |  |   |         | 

15

---



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 June 30,
2006 was 8.22%. 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 June 30, 2006, we had
outstanding letters of credit totaling $7.5 million, which served as collateral
for our various workers compensation insurance programs.

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
June 30, 2006, the Company had $24.5 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.

EPLI
incurred direct costs in connection with this offering. 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 we 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 2014 Notes
are conditioned upon the completion of the initial public offering. (See Note
12)

16

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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 $0.8 million for each of the 26-week periods ended June 30, 2005 and June
30, 2006. The effective tax rates for the 26 weeks ended June 30, 2005 and
2006, were 35.0% and 38.9%, respectively.

11. New Accounting Pronouncements

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.

In
October 2005, the Financial Accounting Standards Board (the FASB) issued FASB
Staff Position (FSP) 13-1, Accounting for Rental Costs Incurred During a
Construction Period. FSP 13-1 requires rental costs associated with ground or
building operating leases that are incurred during a construction period to be
recognized as rental expense. FSP 13-1 applies to reporting periods beginning
after December 15, 2005. Retrospective application in accordance with FASB SFAS
No. 154 Accounting Changes and Error Corrections, is permitted but not
required. The adoption of FSP 13-1 did not have a significant impact on its
financial position or results of operations.

In
June 2005, the FASB ratified Emerging Issues Task Force (EITF) 05-06,
Determining the Amortization Period for Leasehold Improvements Purchased after
Lease Inception or Acquired in a Business Combination. This EITF addresses the
amortization period for leasehold improvements in operating leases that are
either (a) placed in service significantly after and not contemplated at or
near the beginning of the initial lease term or (b) acquired in a business
combination. Leasehold improvements that are placed in service significantly
after and not contemplated at or near the beginning of the lease term should be
amortized over the shorter of the useful life of the assets or a term that
includes required lease periods and renewals that are deemed to be reasonably
assured at the date the leasehold improvements are purchased. Leasehold
improvements acquired in a business combination should be amortized over the
shorter of the useful life of the assets or a term that includes required lease
periods and renewals that are deemed to be reasonably assured at the date of
acquisition. This EITF is effective for leasehold improvements that are
purchased or acquired after June 30, 2005. The adoption of this EITF did not
have a material impact on the Companys consolidated results of operations or
financial position.

In
May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections. SFAS No. 154 requires retrospective application to prior periods
financial statements of a voluntary change in accounting principle, and that a
change in method of depreciation, amortization, or depletion for long-lived,
non-financial assets be accounted for as a change in accounting estimate that
is effected by a change in accounting principle. SFAS No. 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. The Company does not currently believe that the
adoption of SFAS No. 154 will have a significant impact on its financial
position or results of operations.

In
March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional
Asset Retirement Obligations, an interpretation of FASB Statement No. 143
(FIN 47). FIN 47 requires the recognition of a liability for the fair value
of a legally-required conditional asset retirement obligation when incurred, if
the liabilitys fair value can be reasonably estimated. FIN 47 also clarifies
when an entity would have sufficient information to reasonably estimate the
fair value of an asset retirement obligation. FIN 47 is effective for fiscal
years ending after December 15, 2005. The adoption of FIN 47 was not material
to the Companys financial statements for any of the years or periods
presented.

In
December 2004, the FASB issued SFAS 123(R), Share-Based Payment. SFAS 123(R)
requires that companies recognize compensation expense equal to the fair value
of stock options or other share-based payments. The standard was effective for
the Company beginning with the first quarter of fiscal 2006. Because the
Company used the minimum value method for its pro forma disclosures under SFAS
123, the Company applied SFAS 123(R) prospectively to newly issued stock
options. 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. The Companys net income is reduced as a result of
the recognition of the fair value of all newly issued stock options, which is
contingent upon the number of future options granted and other variables.

17

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12. 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.

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
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 26-week periods ended
June 29, 2005 and June 28, 2006 as June 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 June 30, 2006, our restaurant system had 341
restaurants, consisting of 146 company-operated and 195 franchised locations,
located principally in

18

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California,
with additional restaurants in Arizona, Nevada, Texas and Illinois. 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 26 weeks ended June 30, 2006, same-store sales for restaurants
systemwide increased 7.5% over the 26 weeks ended June 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. As of July 25, 2006,
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 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. 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.

19

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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 has 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 uses variable accounting to
determine the change in the incremental value of the award at each reporting
period.

Results of Operations

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

|                                     |  |                           |       |      |  |       |  
|------------------------------------ |  | ------------------------- | ----- | ---- |  | ----- | -
|                                     |  | 13 Weeks Ended
  June 30, |      
|                                     |  |                           |      
|                                     |  | 2005                      |       | 2006 | 
|                                     |  |                           |       |      | 
|                                     |  |                           |       |      | 
|Income Statement Data:               |  |                           |       |      |  |       |  
|                                     |  |                           |       |      |  |       |  
|Restaurant revenue                   |  |                           | 100.0 | %    |  | 100.0 | %
|                                     |  |                           |       |      |  |       |  
|Product cost                         |  |                           | 31.6  |      |  | 30.9  |  
|                                     |  |                           |       |      |  |       |  
|Payroll and benefits                 |  |                           | 25.4  |      |  | 25.7  |  
|                                     |  |                           |       |      |  |       |  
|Depreciation and amortization        |  |                           | 6.3   |      |  | 4.1   |  
|                                     |  |                           |       |      |  |       |  
|Other operating expenses             |  |                           | 31.5  |      |  | 31.3  |  
|                                     |  |                           |       |      |  |       |  
|Operating income                     |  |                           | 12.2  |      |  | 14.8  |  
|                                     |  |                           |       |      |  |       |  
|Interest expense                     |  |                           | 8.3   |      |  | 11.5  |  
|                                     |  |                           |       |      |  |       |  
|Income before income taxes           |  |                           | 3.9   |      |  | 3.3   |  
|                                     |  |                           |       |      |  |       |  
|Net income                           |  |                           | 2.5   |      |  | 2.0   |  
|                                     |  |                           |       |      |  |       |  
|Supplementary Income Statement Data: |  |                           |       |      |  |       |  
|                                     |  |                           |       |      |  |       |  
|Restaurant other operating expense   |  |                           | 18.5  |      |  | 19.6  |  
|                                     |  |                           |       |      |  |       |  
|Franchise expense                    |  |                           | 1.4   |      |  | 1.4   |  
|                                     |  |                           |       |      |  |       |  
|General and administrative expense   |  |                           | 11.6  |      |  | 10.3  |  
|                                     |  |                           |       |      |  |       |  
|Total other operating expenses       |  |                           | 31.5  |      |  | 31.3  |  

20

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

Restaurant
revenue increased $4.5 million, or 7.9%, to $61.7 million for the 13 weeks
ended June 30, 2006 from $57.2 million for the 13 weeks ended June 30, 2005.
This increase was partially due to an additional $1.1 million in restaurant
revenue resulting from a 1.9% 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 $1.8 million in fiscal 2006 from six restaurants
opened in fiscal 2005 and $1.6 million from four restaurants opened in fiscal
2006.

Franchise
revenue increased $0.2 million, or 4.8%, to $4.2 million for the 13 weeks ended
June 30, 2006 from $4.0 million for the 13 weeks ended June 30, 2005. This
increase is due primarily to an increase in royalties resulting from a 6.0%
increase in franchise same-store sales.

Product
cost increased $0.9 million, or 5.3%, to $19.0 million for the 13 weeks ended
June 30, 2006 from $18.1 million for the 13 weeks ended June 30, 2005. These
costs as a percentage of restaurant revenue were 30.9% for the 2006 period
compared to 31.6% for the 2005 period. The 0.7% 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. This decrease was partially offset by chicken prices increasing
as our new chicken contracts took effect in March 2005.

Payroll
and benefit expenses increased $1.4 million, or 9.3%, to $15.9 million for the
13 weeks ended June 30, 2006 from $14.5 million for the 13 weeks ended June 30,
2005. As a percentage of restaurant revenue, these costs increased 0.3% to
25.7% for the 2006 period from 25.4% for the 2005 period. This increase is
primarily attributed to increased spending on manager training and increased
workers compensation expense in the current period.

Depreciation
and amortization decreased $1.1 million, or 30.3%, to $2.5 million for the 13
weeks ended June 30, 2006 compared to $3.6 million for the 13 weeks ended June
30, 2005. These costs as a percentage of restaurant revenue decreased 2.2% to
4.1% in 2006 from 6.3% 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
$1.6 million, or 14.8%, to $12.1 million for the 13 weeks ended June 30, 2006
from $10.6 million for the 13 weeks ended June 30, 2005. These costs as a
percentage of restaurant revenue increased 1.1% to 19.6% for the 2006 period
from 18.5% 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 $0.4 million. Advertising
expense was also $0.4 million lower in the 2006 period. Our advertising
spending in the second quarter of 2006 was 3.4% of sales which was under the
planned annual rate of 4%, compared to the second quarter of 2005 which was
4.4% 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

21

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expense
increased to $0.9 million the 13-week periods ended June 30, 2006 compared to
$0.8 million for the 2005 period.

General
  and administrative expense decreased $0.3 million, or 4.8%, to $6.3 million
  for the 13 weeks ended June 30, 2006 from $6.6 million for the 13 weeks ended
  June 30, 2005. General and administrative expense as a percentage of revenue
  was 10.3% and 11.6% for the thirteen weeks ended June 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 decrease was also attributed to an asset impairment charge in the
  2005 period that did not recur in the 2006 period of $0.9 million, a decrease
  in bonuses of $0.4 million, partially offset by increased salaries and wages
  of $0.3 due primarily to increased headcount. The decrease was also partially
  offset by an increase in 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.

Interest
expense, net of interest income, increased $2.3 million, or 49.0%, to $7.1
million for the 13 weeks ended June 30, 2006 from $4.8 million for the 13 weeks
ended June 30, 2005. Our average debt balances for the 2006 period increased to
$258.0 million compared to $169.1 million for the 2005 period and our average
interest rate increased to 10.55% for the 2006 period compared to 10.08% for
the 2005 period.

Our
provision for income taxes consisted of income tax expense of $0.8 million for
each of the 13-week periods ended June 30, 2006 and June 30, 2005, for an
effective tax rate of 38.9% for 2006 and 35.0% for 2005.

As
a result of the factors above, net income remained relatively flat at $1.2
million for the 13 weeks ended June 30, 2006 compared with $1.4 million for the
13 weeks ended June 30, 2005, or 2.0% and 2.5% as a percentage or restaurant
revenue, for the 13 weeks ended June 30, 2006 and 2005, respectively.

Our
operating results for the 26 weeks ended June 30, 2005 and 2006 are expressed
as a percentage of restaurant revenue below:

|                                     |  |                           |       |      |  |       |  
|------------------------------------ |  | ------------------------- | ----- | ---- |  | ----- | -
|                                     |  | 26 Weeks Ended
  June 30, |      
|                                     |  |                           |      
|                                     |  | 2005                      |       | 2006 | 
|                                     |  |                           |       |      | 
|                                     |  |                           |       |      | 
|Income Statement
Data:               |  |                           |       |      |  |       |  
|                                     |  |                           |       |      |  |       |  
|Restaurant
  revenue                 |  |                           | 100.0 | %    |  | 100.0 | %
|                                     |  |                           |       |      |  |       |  
|Product cost                         |  |                           | 31.7  |      |  | 31.5  |  
|                                     |  |                           |       |      |  |       |  
|Payroll and
  benefits               |  |                           | 25.9  |      |  | 25.5  |  
|                                     |  |                           |       |      |  |       |  
|Depreciation
  and amortization      |  |                           | 6.5   |      |  | 4.0   |  
|                                     |  |                           |       |      |  |       |  
|Other operating expenses             |  |                           | 31.8  |      |  | 32.3  |  
|                                     |  |                           |       |      |  |       |  
|Operating
  income                   |  |                           | 11.0  |      |  | 13.5  |  
|                                     |  |                           |       |      |  |       |  
|Interest expense                     |  |                           | 8.8   |      |  | 11.8  |  
|                                     |  |                           |       |      |  |       |  
|Income before income taxes           |  |                           | 2.2   |      |  | 1.7   |  
|                                     |  |                           |       |      |  |       |  
|Net income                           |  |                           | 1.4   |      |  | 1.0   |  
|                                     |  |                           |       |      |  |       |  
|Supplementary
Income Statement Data: |  |                           |       |      |  |       |  
|                                     |  |                           |       |      |  |       |  
|Restaurant
  other operating expense |  |                           | 18.9  |      |  | 20.3  |  
|                                     |  |                           |       |      |  |       |  
|Franchise
  expense                  |  |                           | 1.4   |      |  | 1.5   |  
|                                     |  |                           |       |      |  |       |  
|General and
  administrative expense |  |                           | 11.5  |      |  | 10.5  |  
|                                     |  |                           |       |      |  |       |  
|Total other operating expenses       |  |                           | 31.8  |      |  | 32.3  |  

22

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26
Weeks Ended June 30, 2006 Compared to 26 Weeks Ended June 30, 2005

Restaurant
revenue increased $12.5 million, or 11.5%, to $120.8 million for the 26 weeks
ended June 30, 2006 from $108.3 million for the 26 weeks ended June 30, 2005.
This increase was partially due to an additional $6.2 million in restaurant
revenue resulting from a 5.8% 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 $4.2 million in fiscal 2006 from six restaurants
opened in fiscal 2005 and $2.1 million from four restaurants opened in fiscal
2006.

Franchise revenue increased $0.7 million, or 9.3%, to $8.2 million for the 26
weeks ended June 30, 2006 from $7.5 million for the 26 weeks ended June 30,
2005. This increase is due primarily to an increase in royalties resulting from
a 9.1% increase in franchise same-store sales.

Product cost increased $3.7 million, or 10.8%, to $38.0 million for the 26
weeks ended June 30, 2006 from $34.3 million for the 26 weeks ended June 30,
2005. These costs as a percentage of restaurant revenue were 31.5% for the 2006
period compared to 31.7% for the 2005 period. The 0.2% 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. This decrease was partially offset by chicken prices increasing
as our new chicken contracts took effect in March 2005.

Payroll and benefit expenses increased $2.7 million, or 9.8%, to $30.8 million
for the 26 weeks ended June 30, 2006 from $28.1 million for the 26 weeks ended
June 30, 2005. As a percentage of restaurant revenue, these costs decreased
0.4% to 25.5% for the 2006 period from 25.9% 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 $2.2 million, or 31.0%, to $4.9 million
for the 26 weeks ended June 30, 2006 compared to $7.1 million for the 26 weeks
ended June 30, 2005. These costs as a percentage of restaurant revenue
decreased 2.5% to 4.0% 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 $4.0 million, or 19.9%, to $24.5 million for the 26 weeks
ended June 30, 2006 from $20.5 million for the 26 weeks ended June 30, 2005.
These costs as a percentage of restaurant revenue increased 1.4% to 20.3% for
the 2006 period from 18.9% for the 2005 period. The increase in operating costs
is due primarily to an increase in occupancy expense of $1.7 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 $0.6
million, increased preopening expenses of $0.2 million and higher repair and
maintenance costs of $0.7 million, which is primarily 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.

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 $1.8 million the 26-week periods ended June 30, 2006
compared to $1.5 million for the 2005 period.

General and administrative expense remained relatively flat at $12.7 million
for the 26 weeks ended June 30, 2006 at $12.5 million for the 26 weeks ended
June 30, 2005. General and administrative expense as a percentage of revenue was
10.5% and 11.5% for the 26 weeks ended June 30, 2006 and 2005,

23

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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 decrease as a percentage of revenue was also attributed to an asset
impairment charge in the 2005 period that did not recur in the 2006 period of
$1.1 million, a decrease in bonuses of $0.4 million, partially offset by
increased salaries and wages of $0.7 primarily due to increased headcount,
increased legal fees of $0.3 million and an increase in outside services
expense of $0.2 million. The decrease was also partially offset by an increase
in 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.

Interest expense, net of interest income, increased $4.7 million, or 49.6%, to
$14.2 million for the 26 weeks ended June 30, 2006 from $9.5 million for the 26
weeks ended June 30, 2005. Our average debt balances for the 2006 period
increased to $259.3 million compared to $169.2 million for the 2005 period and
our average interest rate increased to 10.54% for the 2006 period compared to
9.91% for the 2005 period.

Our provision for income taxes consisted of income tax expense of $0.8 million
for each of the 26-week period ended June 30, 2006 and June 30, 2005, for an
effective tax rate of 38.9% for 2006 and 35.0% for 2005.

As
  a result of the factors above, net income decreased $0.3 million to $1.3 million
  for the 26 weeks ended June 30, 2006 from $1.6 million for the 26 weeks ended
  June 30, 2005, or 1.0% and 1.4% as a percentage or restaurant revenue, for the
  26 weeks ended June 30, 2006 and 2005, respectively.

Liquidity and Capital Resources

Our
  principal liquidity requirements are to service our debt and meet our capital
  expenditure needs. Our indebtedness at June 30, 2006 was $258.2 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 decreased $1.9 million from $3.6 million at
December 28, 2005 to $1.7 million at June 30, 2006. In the first six
months of fiscal 2006, we made $0.5 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

24

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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 $9.9
million for the 26 weeks ended June 30, 2006 compared with net cash provided by
operating activities of $13.9 million for the 26 weeks ended June 30, 2005. The
decrease in cash provided by operating activities of $4.0 million in the 2006
period compared to the 2005 period was primarily attributable to decreased
depreciation and amortization of assets of $2.2 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, and a decreased accounts
payable balance of $1.1 million partially offset by a decrease in income taxes
receivable of $1.8 million.

Investing Activities.We had net cash used in investing activities of
  $6.7 million for the 26 weeks ended June 30, 2006 compared with $6.9 million
  for the 26 weeks ended June 30, 2005. The decrease in cash used in investing
  activities of $0.2 million was related to decreased spending in expenditures
  for new store construction of $0.5 million, $1.2 million spent on our POS rollout
  in the 2005 period that did not recur in the 2006 period, and $1.1 million in
  spending for other assets in the 2005 period, partially offset by $2.0 million
  in acquisition costs paid in the 2006 period and $0.5 million in proceeds from
  disposition of assets in 2005 that did not recur in 2006.

Financing Activities.We had net cash used in financing activities of
  $5.1 million for the 26 weeks ended June 30, 2006 compared with net cash used
  in financing activities of $3.4 million for the 26 weeks ended June 30, 2005.
  The increase in cash used in financing activities in the 2006 period was attributable
  to $1.2 million in deferred financing costs paid in the 2006 period and the
  $2.8 million payment of the revolver partially offset by decreased principal
  payments of our new term loan.

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 June 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.

25

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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 are conditioned upon
the completion of the initial public offering.

At June 30, 2006, we had $24.5 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.

At June 30, 2006, we had outstanding letters of credit totaling $7.5 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 June 30, 2006, the Company recorded a liability for unused
advertising fees collected from franchisees of $1.4 million and has a
corresponding $1.2 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 June 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 1.10 to 1; and
| |   |                                                                                                                                 
| |  | EPLs
  consolidated leverage ratio (as such term is defined in the senior credit
  agreement) was 5.9 to 1.                  

26

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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 June 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 1.13 to 1 and 5.7 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.

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.

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 June 30,
2006 to be material.

Item 4. Controls and Procedures

27

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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 June 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.

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
their insurance contract to defend and indemnify, among other things, El Pollo
Loco 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 as well
as Risk Factors, included in the Registration Statement on Form S-1 filed by
Holdings on May 8, 2006, as amended.

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.

28

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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

29

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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: August 14, 2006 | By:                   | /s/
  Stephen E. Carley       
|                      |                       |                               
|                      |                       | Stephen
  E. Carley           
|                      |                       | President                     
|                      |                       |                               
|                      | By:                   | /s/
  Joseph Stein            
|                      |                       |                               
|                      |                       | Joseph
  Stein                
|                      |                       | Vice
  President and Treasurer

30

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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

31

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