UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K/A

(Amendment
No. 1)







|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
|- | ----------------------------------------------------------------

EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2007

OR



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

EXCHANGE ACT OF 1934

For the transition period from
                 to

Commission file number
333-141699-05





YANKEE HOLDING CORP.

(Exact name of
registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 20-8304743                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                                     |  |           
|---------------------------------------------------- |  | ----------
|16 Yankee Candle Way, South Deerfield, Massachusetts |  | 01373     
|(Address of principal executive offices)             |  | (Zip Code)

Registrants telephone number, including area code: (413) 665-8306

Securities registered pursuant to Section 12 (b) of the Act:

None





Indicate by check mark whether the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x

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

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

Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act.

Large accelerated filer   ̈    Accelerated
filer   ̈     Non-accelerated filer  x    Smaller Reporting Company   ̈

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

As of March 27, 2008 there were 499,560 shares of Yankee Holding Corp. common stock, $.01 par value, outstanding, all of which are owned by a holding company, YCC Holdings LLC.

Documents incorporated by reference (to the extent indicated herein).

None









---

EXPLANATORY NOTE

Yankee Holding Corp. hereby amends Part II, Item 8 of its Annual Report for the fiscal year ended December 29, 2007 (the Annual Report), as originally filed with the Securities and Exchange
Commission on March 28, 2008 (the Original Filing). Yankee Holding Corp. is filing this Amendment No. 1 on Form 10-K/A solely to correct a typographical error in the Report of Independent Registered Public Accounting Firm. The
revised Item 8 now includes such amended report.

In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended, Yankee Holding
Corp. has set forth the text of Item 8 in its entirety. No other revisions or amendments have been made to Part II, Item 8 or to any other portion of the Annual Report. This Amendment does not reflect events occurring after March 28,
2008, the date of the Original Filing, or modify or update those disclosures that may have been affected by subsequent events. In addition, currently-dated certifications from Yankee Holding Corp.s Chief Executive Officer and Chief Financial
Officer have been included as exhibits to this Amendment.



|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Yankee Holding Corp.

South Deerfield, Massachusetts

We have audited the accompanying consolidated balance sheet of Yankee Holding Corp. and subsidiaries (the Successor Company) as of December 29, 2007, the related consolidated statements of operations,
stockholders equity and cash flows of the Successor Company for the period from February 6, 2007 to December 29, 2007, the consolidated statements of operations, stockholders equity and cash flows of The Yankee Candle Company,
Inc. and subsidiaries (the Predecessor Company) for the period from December 31, 2006 to February 5, 2007 and the consolidated balance sheet of the Predecessor Company as of December 30, 2006, and the related consolidated
statements of operations, stockholders equity and cash flows for the fifty-two week periods ended December 30, 2006 and December 31, 2005. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Successor Company as of December 29, 2007 and the Predecessor Company as of December 30, 2006, and the
results of the operations and cash flows of the Successor Company for the period February 6, 2007 through December 29, 2007, and the Predecessor Company for the period December 31, 2006 through February 5, 2007 and the fifty-two
week periods ended December 30, 2006 and December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 13, the Company adopted Financial Accounting Standards Board (FASB) Interpretation 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109, effective
December 31, 2006.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Companys internal control over financial reporting as of December 29, 2007, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 27, 2008 expressed an unqualified opinion on the Companys internal control over financial reporting.



|                         
|-------------------------
|                         
|/s/ Deloitte & Touche LLP
|                         
|Boston, Massachusetts    
|March 27, 2008           



2



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (AND PREDECESSOR)

CONSOLIDATED BALANCE SHEETS

(in thousands,
except share data)



|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | --------- | - |  |  | ---------------- | - | -------
|                                                                                                                                             |  | Successor        |           |   |  |  | Predecessor     
|                                                                                                                                             |  | December 29,2007 |           |   |  |  | December 30,2006
|ASSETS                                                                                                                                       |  |                  |           |   |  |  |                  |   |        
|CURRENT ASSETS:                                                                                                                              |  |                  |           |   |  |  |                  |   |        
|Cash and cash equivalents                                                                                                                    |  | $                | 5,627     |   |  |  |                  | $ | 22,773 
|Accounts receivable, net                                                                                                                     |  |                  | 52,126    |   |  |  |                  |   | 33,769 
|Inventory                                                                                                                                    |  |                  | 69,963    |   |  |  |                  |   | 61,130 
|Prepaid expenses and other current assets                                                                                                    |  |                  | 9,344     |   |  |  |                  |   | 8,651  
|Deferred tax assets                                                                                                                          |  |                  | 18,271    |   |  |  |                  |   | 5,872  
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|TOTAL CURRENT ASSETS                                                                                                                         |  |                  | 155,331   |   |  |  |                  |   | 132,195
|                                                                                                                                             |  |                  |          
|PROPERTY AND EQUIPMENT-NET                                                                                                                   |  |                  | 155,911   |   |  |  |                  |   | 140,603
|MARKETABLE SECURITIES                                                                                                                        |  |                  | 259       |   |  |  |                  |   | 2,021  
|DEFERRED TAX ASSETS                                                                                                                          |  |                  |          |   |  |  |                  |   | 67,288 
|GOODWILL                                                                                                                                     |  |                  | 1,019,982 |   |  |  |                  |   | 13,852 
|INTANGIBLE ASSETS                                                                                                                            |  |                  | 414,242   |   |  |  |                  |   | 15,624 
|DEFERRED FINANCING COSTS                                                                                                                     |  |                  | 28,654    |   |  |  |                  |   | 596    
|OTHER ASSETS                                                                                                                                 |  |                  | 1,418     |   |  |  |                  |   | 743    
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|TOTAL ASSETS                                                                                                                                 |  | $                | 1,775,797 |   |  |  |                  | $ | 372,922
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                         |  |                  |           |   |  |  |                  |   |        
|                                                                                                                                             |  |                  |          
|CURRENT LIABILITIES:                                                                                                                         |  |                  |           |   |  |  |                  |   |        
|Accounts payable                                                                                                                             |  | $                | 21,613    |   |  |  |                  | $ | 26,052 
|Accrued payroll                                                                                                                              |  |                  | 17,394    |   |  |  |                  |   | 19,802 
|Accrued interest                                                                                                                             |  |                  | 17,679    |   |  |  |                  |   | 428    
|Accrued income taxes                                                                                                                         |  |                  | 15,755    |   |  |  |                  |   | 26,600 
|Accrued purchases of property and equipment                                                                                                  |  |                  | 2,818     |   |  |  |                  |   | 3,515  
|Accrued sales tax                                                                                                                            |  |                  | 4,822     |   |  |  |                  |   | 5,168  
|Other accrued liabilities                                                                                                                    |  |                  | 31,087    |   |  |  |                  |   | 16,335 
|Current portion of long-term debt                                                                                                            |  |                  | 6,500     |   |  |  |                  |   |       
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|TOTAL CURRENT LIABILITIES                                                                                                                    |  |                  | 117,668   |   |  |  |                  |   | 97,900 
|                                                                                                                                             |  |                  |          
|DEFERRED COMPENSATION OBLIGATION                                                                                                             |  |                  | 410       |   |  |  |                  |   | 2,213  
|DEFERRED TAX LIABILITIES                                                                                                                     |  |                  | 105,565   |   |  |  |                  |   |       
|LONG-TERM DEBT                                                                                                                               |  |                  | 1,123,625 |   |  |  |                  |   | 140,000
|DEFERRED RENT                                                                                                                                |  |                  | 10,230    |   |  |  |                  |   | 17,244 
|OTHER LONG-TERM LIABILITIES                                                                                                                  |  |                  | 1,694     |   |  |  |                  |   |       
|COMMITMENTS AND CONTINGENCIES (Note 17)                                                                                                      |  |                  |           |   |  |  |                  |   |        
|STOCKHOLDERS EQUITY:                                                                                                                        |  |                  |           |   |  |  |                  |   |        
|Common stock  Successor: $.01 par value; 500,000 issued and 499,660 outstanding at December 29, 2007                                        |  |                  | 418,083   |   |  |  |                  |   | 399    
|Common stock  Predecessor: $.01 par value; 300,000,000 shares authorized; 39,939,837 issued and 39,846,137 outstanding at
December 30, 2006 |  |                  |           |   |  |  |                  |   |        
|Treasury stock  Successor: at cost, 300 shares at December 29, 2007                                                                         |  |                  | (294      | ) |  |  |                  |   |       
|Additional paid-in capital                                                                                                                   |  |                  | 670       |   |  |  |                  |   | 105,718
|Retained earnings                                                                                                                            |  |                  | 4,527     |   |  |  |                  |   | 8,467  
|Accumulated other comprehensive (loss) income                                                                                                |  |                  | (6,381    | ) |  |  |                  |   | 981    
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|Total stockholders equity                                                                                                                   |  |                  | 416,605   |   |  |  |                  |   | 115,565
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                   |  | $                | 1,775,797 |   |  |  |                  | $ | 372,922
|                                                                                                                                             |  |                  |           |   |  |  |                  |   |        

See notes to consolidated financial statements



3



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (AND PREDECESSOR)

CONSOLIDATED STATEMENTS OF OPERATIONS

(in
thousands)



|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|-------------------------------------------------------------- | ------------------------------------------ | --------- | ------- | - |  | ------------------------------------------ | ----------- | - | ------------------------------------- | - |  | ------------------------------------- | ------- | - |  | - | ------- | -
|                                                               |                                            | Successor |         |   |  |                                            | Predecessor |  
|                                                               | PeriodFebruary 6, 2007to December 29, 2007 |           |         |   |  | PeriodDecember 31, 2006to February 5, 2007 |             |   | Fifty-twoWeeks EndedDecember 30, 2006 |   |  | Fifty-twoWeeks EndedDecember 31, 2005 |        
|SALES                                                          |                                            | $         | 683,573 |   |  |                                            |             | $ | 53,382                                |   |  | $                                     | 687,557 |   |  | $ | 601,181 |  
|COST OF SALES                                                  |                                            |           | 329,571 |   |  |                                            |             |   | 24,553                                |   |  |                                       | 297,338 |   |  |   | 257,455 |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|GROSS PROFIT                                                   |                                            |           | 354,002 |   |  |                                            |             |   | 28,829                                |   |  |                                       | 390,219 |   |  |   | 343,726 |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|                                                               |                                            |           |         |   | 
|OPERATING EXPENSES:                                            |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|Selling expenses                                               |                                            |           | 192,398 |   |  |                                            |             |   | 16,201                                |   |  |                                       | 168,194 |   |  |   | 146,055 |  
|General and administrative expenses                            |                                            |           | 62,717  |   |  |                                            |             |   | 13,828                                |   |  |                                       | 73,135  |   |  |   | 57,366  |  
|Restructuring charge                                           |                                            |           |        |   |  |                                            |             |   |                                      |   |  |                                       | (397    | ) |  |   | 5,546   |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|Total operating expenses                                       |                                            |           | 255,115 |   |  |                                            |             |   | 30,029                                |   |  |                                       | 240,932 |   |  |   | 208,967 |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|INCOME (LOSS) FROM OPERATIONS                                  |                                            |           | 98,887  |   |  |                                            |             |   | (1,200                                | ) |  |                                       | 149,287 |   |  |   | 134,759 |  
|                                                               |                                            |           |         |   | 
|OTHER (INCOME) EXPENSE:                                        |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|Interest income                                                |                                            |           | (43     | ) |  |                                            |             |   | (1                                    | ) |  |                                       | (30     | ) |  |   | (23     | )
|Interest expense                                               |                                            |           | 92,443  |   |  |                                            |             |   | 986                                   |   |  |                                       | 15,358  |   |  |   | 7,250   |  
|Other income                                                   |                                            |           | (1,152  | ) |  |                                            |             |   | (15                                   | ) |  |                                       | (105    | ) |  |   | (502    | )
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|Total other expense                                            |                                            |           | 91,248  |   |  |                                            |             |   | 970                                   |   |  |                                       | 15,223  |   |  |   | 6,725   |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|INCOME (LOSS) BEFORE PROVISION FOR (BENEFIT FROM) INCOME TAXES |                                            |           | 7,639   |   |  |                                            |             |   | (2,170                                | ) |  |                                       | 134,064 |   |  |   | 128,034 |  
|                                                               |                                            |           |         |   | 
|PROVISION FOR (BENEFIT FROM) INCOME TAXES                      |                                            |           | 3,112   |   |  |                                            |             |   | (340                                  | ) |  |                                       | 49,549  |   |  |   | 49,933  |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  
|NET INCOME (LOSS)                                              |                                            | $         | 4,527   |   |  |                                            |             | $ | (1,830                                | ) |  | $                                     | 84,515  |   |  | $ | 78,101  |  
|                                                               |                                            |           |         |   |  |                                            |             |   |                                       |   |  |                                       |         |   |  |   |         |  

See notes to consolidated financial statements



4



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (AND PREDECESSOR)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(in thousands, except share data)



|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|--------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------------------ | ------- | - | -------------- | ------ | ------- | ------------------------------------ |  | --- | ------------------------------------------ | - | ---- | ------------------- |  | - | -------- | - |  | - | ------ | - |  | - | ------ | - |  | - | -------- | -
|                                                                                        |  | Common Stock |   |  | AdditionalPaid inCapital |         |   | Treasury Stock |        |         | RetainedEarnings(AccumulatedDeficit) |  |     | AccumulatedOtherComprehensiveIncome (Loss) |   |      | ComprehensiveIncome |  |   | Total    |  
|                                                                                        |  | Shares       |   |  | Amount                   |         |   |                | Shares |         | Amount                               |  |     |                                            |   |     
|(Predecessor)                                                                           |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|BALANCE, JANUARY 1, 2005                                                                |  | 47,309       |   |  | $                        | 473     |   |                | $      | 105,737 |                                      |  |    |                                            | $ |     |                     |  | $ | 73,447   |   |  | $ | 6      |   |  |   |        |   |  | $ | 179,663  |  
|                                                                                        |  |              |   |  |                          |         |   |                |       
|Issuance of common stock and option exercises, including related tax benefits of $978   |  | 197          |   |  |                          | 1       |   |                |        | 4,006   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 4,007    |  
|Stock compensation expense                                                              |  |             |   |  |                          |        |   |                |        | 3,418   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 3,418    |  
|Payments for the redemption of common stock                                             |  | (6,543       | ) |  |                          | (64     | ) |                |        | (17,029 | )                                    |  |    |                                            |   |     |                     |  |   | (167,902 | ) |  |   |       |   |  |   |        |   |  |   | (184,995 | )
|Payments for dividends                                                                  |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | (11,182  | ) |  |   |       |   |  |   |        |   |  |   | (11,182  | )
|Comprehensive income:                                                                   |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Net income                                                                              |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | 78,101   |   |  |   |       |   |  | $ | 78,101 |   |  |   | 78,101   |  
|Foreign currency translation                                                            |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   | (868   | ) |  |   | (868   | ) |  |   | (868     | )
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Comprehensive income                                                                    |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  | $ | 77,233 |   |  |   |         |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|                                                                                        |  |              |   |  |                          |         |   |                |       
|BALANCE, DECEMBER 31, 2005                                                              |  | 40,963       |   |  |                          | 410     |   |                |        | 96,132  |                                      |  |    |                                            |   |     |                     |  |   | (27,536  | ) |  |   | (862   | ) |  |   |        |   |  |   | 68,144   |  
|                                                                                        |  |              |   |  |                          |         |   |                |       
|Issuance of common stock and option exercises, including related tax benefits of $1,808 |  | 320          |   |  |                          | 3       |   |                |        | 7,362   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 7,365    |  
|Stock compensation expense                                                              |  |             |   |  |                          |        |   |                |        | 5,772   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 5,772    |  
|Payments for the redemption of common stock                                             |  | (1,437       | ) |  |                          | (14     | ) |                |        | (3,548  | )                                    |  |    |                                            |   |     |                     |  |   | (38,415  | ) |  |   |       |   |  |   |        |   |  |   | (41,977  | )
|Payments for dividends                                                                  |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | (10,097  | ) |  |   |       |   |  |   |        |   |  |   | (10,097  | )
|Comprehensive income:                                                                   |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Net income                                                                              |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | 84,515   |   |  |   |       |   |  | $ | 84,515 |   |  |   | 84,515   |  
|Foreign currency translation                                                            |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   | 1,843  |   |  |   | 1,843  |   |  |   | 1,843    |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Comprehensive income                                                                    |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  | $ | 86,358 |   |  |   |         |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|                                                                                        |  |              |   |  |                          |         |   |                |       
|BALANCE, DECEMBER 30, 2006                                                              |  | 39,846       |   |  |                          | 399     |   |                |        | 105,718 |                                      |  |    |                                            |   |     |                     |  |   | 8,467    |   |  |   | 981    |   |  |   |        |   |  |   | 115,565  |  
|Tax benefit from exercise of stock options                                              |  |             |   |  |                          |        |   |                |        | 3,818   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 3,818    |  
|Stock compensation expense                                                              |  |             |   |  |                          |        |   |                |        | 8,638   |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 8,638    |  
|Cumulative effect of adoption of FIN 48                                                 |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | (224     | ) |  |   |       |   |  |   |        |   |  |   | (224     | )
|Comprehensive loss:                                                                     |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Net loss                                                                                |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | (1,830   | ) |  |   |       |   |  | $ | (1,830 | ) |  |   | (1,830   | )
|Foreign currency translation                                                            |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   | 58     |   |  |   | 58     |   |  |   | 58       |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Comprehensive loss                                                                      |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  | $ | (1,772 | ) |  |   |         |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|                                                                                        |  |              |   |  |                          |         |   |                |       
|BALANCE, FEBRUARY 5, 2007                                                               |  | 39,846       |   |  |                          | 399     |   |                |        | 118,174 |                                      |  |    |                                            |   |     |                     |  |   | 6,413    |   |  |   | 1,039  |   |  |   |        |   |  |   | 126,025  |  
|(Successor)                                                                             |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Issuance of common stock, net of $15,000 of issuance costs                              |  | 1,000        |   |  |                          | 418,083 |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 418,083  |  
|Stock split                                                                             |  | 499,000      |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   |         |  
|Acquisition of treasury stock                                                           |  |             |   |  |                          |        |   |                |        |        |                                      |  | 340 |                                            |   | (294 | )                   |  |   |         |   |  |   |       |   |  |   |        |   |  |   | (294     | )
|Stock compensation expense                                                              |  |             |   |  |                          |        |   |                |        | 670     |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 670      |  
|Comprehensive loss:                                                                     |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Net income                                                                              |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   | 4,527    |   |  |   |       |   |  | $ | 4,527  |   |  |   | 4,527    |  
|Foreign currency translation                                                            |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   | (651   | ) |  |   | (651   | ) |  |   | (651     | )
|Interest rate swap                                                                      |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   | (5,730 | ) |  |   | (5,730 | ) |  |   | (5,730   | )
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|Comprehensive loss                                                                      |  |             |   |  |                          |        |   |                |        |        |                                      |  |    |                                            |   |     |                     |  |   |         |   |  |   |       |   |  | $ | (1,854 | ) |  |   |         |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  
|BALANCE, DECEMBER 29, 2007                                                              |  | 500,000      |   |  | $                        | 418,083 |   |                | $      | 670     |                                      |  | 340 |                                            | $ | (294 | )                   |  | $ | 4,527    |   |  | $ | (6,381 | ) |  |   |        |   |  | $ | 416,605  |  
|                                                                                        |  |              |   |  |                          |         |   |                |        |         |                                      |  |     |                                            |   |      |                     |  |   |          |   |  |   |        |   |  |   |        |   |  |   |          |  

See notes to consolidated financial statements



5



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (AND PREDECESSOR)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in
thousands)



|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|---------------------------------------------------------------------------------------- |  | ---------------------------------------- | ---------- | - |  |  | ---------------------------------------- | - | ------- | ----------------------------------- |  | - | ----------------------------------- | - |  | - | -------- | -
|                                                                                         |  | Successor                                |            |   |  |  | Predecessor                              |  
|                                                                                         |  | PeriodFebruary 6,2007 toDecember 29,2007 |            |   |  |  | PeriodDecember 31,2006 toFebruary 5,2007 |   |         | Fifty-twoWeeksEndedDecember30, 2006 |  |   | Fifty-twoWeeksEndedDecember31, 2005 |  
|CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:                                   |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Net income (loss)                                                                        |  | $                                        | 4,527      |   |  |  |                                          | $ | (1,830  | )                                   |  | $ | 84,515                              |   |  | $ | 78,101   |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Depreciation and amortization                                                            |  |                                          | 41,988     |   |  |  |                                          |   | 2,673   |                                     |  |   | 26,780                              |   |  |   | 24,788   |  
|Unrealized loss (gain) on marketable securities                                          |  |                                          | 238        |   |  |  |                                          |   | (31     | )                                   |  |   | 13                                  |   |  |   | (5       | )
|Share-based compensation expense                                                         |  |                                          | 670        |   |  |  |                                          |   | 8,638   |                                     |  |   | 5,772                               |   |  |   | 3,418    |  
|Deferred taxes                                                                           |  |                                          | (14,132    | ) |  |  |                                          |   | (3,905  | )                                   |  |   | 7,549                               |   |  |   | 7,864    |  
|Non-cash charge related to increased inventory carrying value                            |  |                                          | 40,472     |   |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Loss on disposal and impairment of property and equipment                                |  |                                          | 640        |   |  |  |                                          |   | 14      |                                     |  |   | 450                                 |   |  |   | 2,858    |  
|Investments in marketable securities                                                     |  |                                          | (581       | ) |  |  |                                          |   | (27     | )                                   |  |   | (772                                | ) |  |   | (719     | )
|Excess tax benefit from exercise of stock options                                        |  |                                          |           |   |  |  |                                          |   | (4,317  | )                                   |  |   | (960                                | ) |  |   |         |  
|Changes in assets and liabilities                                                        |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Accounts receivable, net                                                                 |  |                                          | (18,389    | ) |  |  |                                          |   | 179     |                                     |  |   | 9,551                               |   |  |   | (14,861  | )
|Inventory                                                                                |  |                                          | (2,958     | ) |  |  |                                          |   | (2,739  | )                                   |  |   | (1,973                              | ) |  |   | (8,609   | )
|Prepaid expenses and other assets                                                        |  |                                          | (1,428     | ) |  |  |                                          |   | 336     |                                     |  |   | 617                                 |   |  |   | (1,079   | )
|Accounts payable                                                                         |  |                                          | 2,306      |   |  |  |                                          |   | (4,443  | )                                   |  |   | 4,363                               |   |  |   | 891      |  
|Income taxes payable                                                                     |  |                                          | (9,456     | ) |  |  |                                          |   | 3,642   |                                     |  |   | 6,620                               |   |  |   | (4,459   | )
|Accrued expenses and other liabilities                                                   |  |                                          | 29,327     |   |  |  |                                          |   | (8,257  | )                                   |  |   | 1,520                               |   |  |   | 18,355   |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                      |  |                                          | 73,224     |   |  |  |                                          |   | (10,067 | )                                   |  |   | 144,045                             |   |  |   | 106,543  |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES:                                   |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Purchase of property and equipment                                                       |  |                                          | (28,484    | ) |  |  |                                          |   | (2,250  | )                                   |  |   | (26,822                             | ) |  |   | (34,872  | )
|Acquisition of the Company                                                               |  |                                          | (1,429,476 | ) |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Purchase of intangible assets                                                            |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   | (604     | )
|Payment of contingent consideration on Yankee Candle Fundraising                         |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   | (1,333                              | ) |  |   |         |  
|Cash paid for business acquisitions                                                      |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   | (22,244                             | ) |  |   | (4,180   | )
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|NET CASH USED IN INVESTING ACTIVITIES                                                    |  |                                          | (1,457,960 | ) |  |  |                                          |   | (2,250  | )                                   |  |   | (50,399                             | ) |  |   | (39,656  | )
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:                                   |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Payments for redemption of common stock                                                  |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   | (41,977                             | ) |  |   | (184,995 | )
|Net proceeds from issuance of common stock                                               |  |                                          | 418,083    |   |  |  |                                          |   |        |                                     |  |   | 5,557                               |   |  |   | 3,029    |  
|Dividends paid                                                                           |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   | (10,097                             | ) |  |   | (11,182  | )
|Repurchase of common stock                                                               |  |                                          | (294       | ) |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Deferred financing costs                                                                 |  |                                          | (32,374    | ) |  |  |                                          |   |        |                                     |  |   | (313                                | ) |  |   | (343     | )
|Excess tax benefit from exercise of stock options                                        |  |                                          |           |   |  |  |                                          |   | 4,317   |                                     |  |   | 960                                 |   |  |   |         |  
|Net (repayment) borrowings under bank credit agreements                                  |  |                                          |           |   |  |  |                                          |   |        |                                     |  |   | (38,000                             | ) |  |   | 103,000  |  
|Borrowings under senior secured term loan facility                                       |  |                                          | 650,000    |   |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Borrowings under senior secured revolving credit facility                                |  |                                          | 111,000    |   |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Borrowings under senior notes and senior subordinated notes                              |  |                                          | 525,000    |   |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|Repayment of borrowings                                                                  |  |                                          | (295,875   | ) |  |  |                                          |   |        |                                     |  |   |                                    |   |  |   |         |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                      |  |                                          | 1,375,540  |   |  |  |                                          |   | 4,317   |                                     |  |   | (83,870                             | ) |  |   | (90,491  | )
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                  |  |                                          | 39         |   |  |  |                                          |   | 11      |                                     |  |   | 342                                 |   |  |   | (165     | )
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                     |  |                                          | (9,157     | ) |  |  |                                          |   | (7,989  | )                                   |  |   | 10,118                              |   |  |   | (23,769  | )
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           |  |                                          | 14,784     |   |  |  |                                          |   | 22,773  |                                     |  |   | 12,655                              |   |  |   | 36,424   |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                 |  | $                                        | 5,627      |   |  |  |                                          | $ | 14,784  |                                     |  | $ | 22,773                              |   |  | $ | 12,655   |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                       |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Cash paid (received) during the period for:                                              |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Interest                                                                                 |  | $                                        | 71,326     |   |  |  |                                          | $ | 903     |                                     |  | $ | 14,865                              |   |  | $ | 6,962    |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Income taxes                                                                             |  | $                                        | 27,013     |   |  |  |                                          | $ | (77     | )                                   |  | $ | 34,404                              |   |  | $ | 46,528   |  
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  
|Net decrease (increase) in accrued purchases of property and equipment                   |  | $                                        | 337        |   |  |  |                                          | $ | 1,520   |                                     |  | $ | 1,948                               |   |  | $ | (3,860   | )
|                                                                                         |  |                                          |            |   |  |  |                                          |   |         |                                     |  |   |                                     |   |  |   |          |  

See notes to consolidated financial statements



6



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (AND PREDECESSOR)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS DECEMBER 31, 2006 TO

FEBRUARY 5, 2007 AND FEBRUARY 6, 2007 TO DECEMBER 29, 2007, AND THE FIFTY-TWO

WEEKS
ENDED DECEMBER 30, 2006 AND DECEMBER 31, 2005

(in thousands, except share data)

1. NATURE OF BUSINESS

Yankee Holding Corp. and subsidiaries (Yankee Candle or the Company) is the leading designer, manufacturer and branded marketer of premium scented candles in the giftware industry. The Company has a 38-year history
of offering its distinctive products and marketing them as affordable luxuries and consumable gifts. Yankee Candle products include a wide variety of jar candles, Samplers® votive candles,
Tarts® wax potpourri, pillars and other candle products, the vast majority of which are marketed under the Yankee Candle® brand.
The Company also sells a wide range of coordinated candle and home decor accessories and has extended its brand into the growing premium home fragrance market segment with products such as Housewarmer® electric home fragrancers, Yankee Candle® branded potpourri, sachets, room sprays and linen sprays and Yankee Candle Car Jars® air fresheners. The Company sells its products through several channels including wholesale customers who operate approximately 16,700 locations in North America, 459 Company-owned and operated retail stores in 43
states as of December 29, 2007, direct mail catalogs, its Internet web sites (www.yankeecandle.com, www.illuminations.com and www.aromanaturals.com), and our subsidiary Yankee Candle Company (Europe) LTD, which has an international wholesale
customer network of approximately 2,700 locations and distributors covering approximately 20 countries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION  On February 6, 2007, The Yankee Candle Company, Inc. (the Predecessor) merged (the Merger) with
an affiliate of Madison Dearborn Partners, LLC (MDP). In connection with the Merger, YCC Holdings LLC, or (Holdings) acquired all of the outstanding capital stock for $1,413,527 in cash. Holdings is owned by an affiliate of
MDP and certain members of our senior management. Holdings owns 100% of the stock of Yankee Holding Corp., (the Parent or Successor), which in turn owns 100% of the stock of The Yankee Candle Company, Inc.

This report contains the audited consolidated financial statements of the Predecessor as of and for the years ended December 30, 2006 and December 31, 2005 and
the period December 31, 2006 to February 5, 2007. The accompanying audited consolidated financial statements as of December 29, 2007 and the period February 6, 2007 to December 29, 2007 are those of the Successor.

We have separated our historical financial results for the Predecessor and Successor. The separate presentation is required as there was a change in
accounting basis, which occurred when purchase accounting was applied to the acquisition of the Predecessor. Purchase accounting requires that the historical carrying value of assets acquired and liabilities assumed be adjusted to fair value, which
may yield results that are not comparable on a period-to-period basis due to the different, and sometimes higher, cost basis associated with the allocation of the purchase price.

Unless the context requires otherwise, we, us, our, or the Company refer to Yankee Holding Corp. and its subsidiaries and, for the periods prior to February 6,
2007, the Predecessor and its subsidiaries.

The fiscal year is the fifty-two or fifty-three weeks ending the Saturday closest to December 31. Fiscal
2007 consists of the combined periods December 31, 2006 to February 5, 2007 (Predecessor) and February 6, 2007 to December 29, 2007 (Successor). The fifty-two weeks ended December 30, 2006 (Predecessor) and December 31,
2005 (Predecessor) are sometimes referred to as fiscal 2006 and fiscal 2005, respectively.

PRINCIPLES OF CONSOLIDATION  The accompanying
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

ACCOUNTING ESTIMATES  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and 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. Actual results
could differ from those estimates.



7



---

SALES RECOGNITION  The Company sells its products both directly to retail customers and through wholesale channels.
Merchandise sales are recognized upon transfer of ownership, including passage of title to the customer and transfer of the risk of loss related to those goods. In the wholesale segment, products are shipped free on board shipping point,
however revenue is recognized at the time the product is received by the customer due to the Companys practice of absorbing risk of loss in the event of damaged or lost shipments. In the retail segment, transfer of title takes place at the
point of sale (i.e., at our retail stores). There are no situations, either in the wholesale or retail segments, where legal risk of loss does not transfer immediately upon receipt by customers. Although the Company does not provide a contractual
right of return, in the course of arriving at practical business solutions to various claims, the Company has allowed sales returns and allowances. In these situations, customer claims for credit or return due to damage, defect, shortage or other
reason must be pre-approved by the Company before credit is issued or such product is accepted for return. Such returns have not precluded sales recognition because the Company has a long history with such return activity, which is used in
estimating a reserve. This accrual, however, is subject to change if actual returns differ from historical and expected return rates. In the wholesale segment, the Company has included an allowance in its financial statements representing its
estimated obligation related to promotional marketing activities. In addition to returns, the Company bears credit risk relative to wholesale customers. The Company has provided an allowance for bad debts in the financial statements based on
estimates of the creditworthiness of customers. However, this allowance is also subject to change. Changes in the estimates could affect operating results.

The Company sells gift cards to customers in retail stores and through catalog and Internet operations. The gift cards do not have an expiration date. At the point of sale of a gift card, the Company records deferred revenue. The Company
recognizes income from gift cards when the gift card is redeemed by the customer. Gift card breakage income is recorded based on the Companys historical redemption pattern (which is subject to change if or when actual patterns of redemptions
change). Based on historical information, the Company determined that redemptions decreased to a de minimis amount 36 months after issuance and that approximately 8% of the gift cards value will never be redeemed. Gift card breakage income is
recorded monthly in proportion to the actual redemption of gift cards in that month based on the Companys historical redemption pattern. Gift card breakage income is included in sales in the consolidated statements of operations.

CASH AND CASH EQUIVALENTS  The Company considers all short-term interest-bearing investments with maturities of three months or less at the date of purchase to
be cash equivalents.

INVENTORIES  The Predecessor valued its inventories on the lastin firstout (LIFO) basis. The Successor
has elected to value its inventories using the firstin firstout (FIFO) basis. Inventory quantities on hand are regularly reviewed, and where necessary provisions for excess and obsolete inventory are recorded based primarily
on the Companys forecast of product demand and production requirements.

PROPERTY AND EQUIPMENT  Property and equipment are stated at cost and
are depreciated on the straight-line method based on the estimated useful lives of the various assets. The estimated useful lives are as follows:



|                           |  |              
|-------------------------- |  | -------------
|Buildings and improvements |  | 5 to 40 years
|Computer equipment         |  | 2 to 6 years 
|Furniture and fixtures     |  | 5 to 10 years
|Equipment                  |  | 10 years     
|Vehicles                   |  | 3 to 5 years 

Leasehold improvements are amortized using the straight-line method over the lesser of the estimated life of the
improvement or the remaining life of the lease. Expenditures for normal maintenance and repairs are charged to expense as incurred.

MARKETABLE SECURITIES
 The Company classifies the marketable securities held in its deferred compensation plan as trading securities under Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt
and Equity Securities. In accordance with the provisions of this statement, the investment balance is stated at fair market value, based on third party market quotes. Unrealized gains and losses are reflected in earnings; realized gains and
losses are also reflected in earnings and are computed using the specific-identification method. The



8



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assets held in the deferred compensation plan reflect amounts due to employees, but are available for general creditors of the Company in the event the
Company becomes insolvent. The Company has recorded the investment balance as a non-current asset and has established a corresponding other long-term liability entitled deferred compensation obligation on the consolidated balance sheets.

The marketable securities held in this plan consist of investments in mutual funds at December 29, 2007 and December 30, 2006. Unrealized gains
(losses) included in operations during the period February 6, 2007 to December 29, 2007 and the period December 31, 2006 to February 5, 2007 were $(238) and $31, respectively. Unrealized gains (losses) included in operations
during the fifty-two weeks ended December 30, 2006 and December 31, 2005 were $(13) and $5, respectively. Realized gains recorded during the period February 6, 2007 to December 29, 2007 were $275. Realized gains of $108 were
recorded during the fifty-two weeks ended December 30, 2006. There were no realized gains (losses) recognized for the period December 31, 2006 to February 5, 2007 and the fifty-two weeks ended December 31, 2005.

GOODWILL AND INTANGIBLE ASSETS  The Company accounts for goodwill and intangible assets in accordance with SFAS No. 142, Goodwill and Other Intangible
Assets. Under SFAS 142, goodwill and certain intangible assets with indefinite lives are not amortized but are subject to an annual impairment test. At December 29, 2007 and December 30, 2006 goodwill totaled $1,019,982 and $13,852,
respectively. Intangible assets totaled $414,242 and $15,624 at December 29, 2007 and December 30, 2006, respectively. Increases in goodwill and intangible assets during fiscal 2007 were primarily related to the acquisition of the Company.
For additional information on the acquisition of the Company see Note 4, Purchase Accounting, to the consolidated financial statements.

Increases in goodwill and tradenames during the year ended December 30, 2006 were primarily due to the acquisition of certain assets of Candle Acquisition Corp. (Illuminations) and an additional purchase price payment of
$1,333 related to the acquisition of Yankee Candle Fundraising, purchased in 2004. This contingent purchase price payment resulted in additional goodwill and was earned as a result of Yankee Candle Fundraising achieving certain revenue growth
targets previously established in the asset purchase agreement. For additional information on the acquisition of Illuminations see Note 8, Business Acquisitions, to the consolidated financial statements.

IMPAIRMENT OF LONG-LIVED ASSETS  The Company reviews the recoverability of its long-lived assets (property and equipment, customer lists, tradenames and goodwill)
when events or changes in circumstances occur that indicate that the carrying value of the assets may not be recoverable and at least annually in the case of indefinite-lived intangible assets and goodwill.

For goodwill, the annual impairment evaluation compares the fair value of each of the Companys reporting units to their respective carrying value. The Company
completed its annual impairment testing of goodwill and indefinite-lived intangible assets as of November 3, 2007 noting that in all cases fair value exceeded carrying value and no impairment was recorded as a result of these tests.

For other long-lived assets, this review is based on the Companys ability to recover the carrying value of the assets from expected undiscounted future cash
flows. If an impairment is indicated, the Company measures the loss based on the fair value of the asset using various valuation techniques. If an impairment loss exists, the amount of the loss will be recorded in the consolidated statements of
operations. In fiscal 2005 the Company recorded $2,474 in fixed asset and other impairments related to the restructuring discussed in note 16, Restructuring Charge, to the consolidated financial statements.

ADVERTISING  The Company expenses advertising costs as they are incurred. Advertising expense was $18,100 and $1,056 for the periods February 6, 2007 to
December 29, 2007 and December 31, 2006 to February 5, 2007, respectively. For the fifty-two weeks ended December 30, 2006, and December 31, 2005, advertising expense was $15,189, and $13,057, respectively.

INCOME TAXES  The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying
amounts and the tax basis of assets and liabilities using expected tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount
that is more likely than not to be realized. The provision for income taxes in the consolidated statements of operations is the actual computed tax obligation or receivable for the period, plus or minus the change during the period in deferred
income tax assets and liabilities.



9



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The Company adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, or FIN 48, effective December 31, 2006. FIN 48 clarifies whether or not to recognize assets or liabilities for tax positions taken that may be challenged by a taxing authority. As a result
of the implementation of FIN 48, the Company recognized a $0.2 million increase in the liability for unrecognized tax benefits, which was accounted for as a decrease to retained earnings. As of December 29, 2007, the Company had $4.2 million of
unrecognized tax benefits, of which $1.8 million would reduce income tax expense if recognized.

FAIR VALUE OF FINANCIAL INSTRUMENTS  At
December 29, 2007, the estimated fair values of all financial instruments, with the exception of the senior and senior subordinated notes, approximate their carrying amounts in the consolidated balance sheets due to (i) the short-term
maturity of certain instruments or (ii) the variable interest rate associated with certain instruments which have the effect of repricing such instruments regularly. The Company estimates the fair value of its fixed rate senior and senior
subordinated notes based on current quoted market prices.

At December 30, 2006, the estimated fair values of all financial instruments approximate
their carrying amounts in the consolidated balance sheets due to (i) the short-term maturity of certain instruments or (ii) the variable interest rate associated with certain instruments which have the effect of repricing such instruments
regularly.

FOREIGN OPERATIONS  Assets and liabilities of foreign operations are translated into U.S. dollars at the exchange rate on the balance
sheet date. The results of foreign subsidiary operations are translated using average rates of exchange during each reporting period. Gains and losses upon translation are deferred and reported as a component of other comprehensive income. Foreign
currency transaction gains or losses, whether realized or unrealized, are recorded directly in the consolidated statements of operations.

EQUITY BASED
COMPENSATION  Effective January 1, 2006, the Company adopted SFAS No. 123(R) Share-Based Payment. The Company adopted SFAS 123(R) using a modified prospective application, as permitted under SFAS 123(R) and, accordingly,
prior period amounts were not restated. Under this application, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain
outstanding at the date of adoption. The effect of the adoption of SFAS 123(R) in 2006 resulted in a reduction of net income of $179. In addition, $960 of the excess tax benefit from the exercise of stock options has been classified as a financing
activity in the statement of cash flows.

Prior to 2006, the Company applied the fair value recognition provisions of SFAS 123 using the prospective
transition method provided by SFAS No. 148 Accounting for Stock Based Compensation-Transition and Disclosure, an amendment of SFAS 123. Under the prospective transition method, the Company had recorded charges in the consolidated
statements of operations representing the grant date fair value of stock options beginning with grants made in fiscal 2003. The fair value of these options continues to be expensed over the vesting period based on the fair value at the date of the
grant.

RECENT ACCOUNTING PRONOUNCEMENTS  In March 2006, the Emerging Issues Task Force reached a consensus on Issue No. 063 How
Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (that is, gross versus net presentation). This issue should be applied to financial reports for interim and annual reporting
periods beginning after December 15, 2006. The Company adopted EITF No. 0603 effective December 31, 2006 without material impact to the financial statements. The Company will continue to use the net basis for presentation.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (SFAS 157). SFAS 157 defines fair value, establishes a
framework for measuring fair value in GAAP and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS 157 does not expand or require new
fair value measures, however the application of this statement may change current practice. The requirements of SFAS 157 are first effective for our fiscal year beginning December 30, 2007 and interim periods within that fiscal year. However,
in February 2008 the FASB decided that an entity need not apply this standard to nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis until the subsequent year.



10



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Accordingly, our adoption of this standard on December 30, 2007 is limited to financial assets and liabilities,
which primarily impacts the valuation of our derivative contract. We do not believe the initial adoption of SFAS 157 will have a material effect on our financial condition, results of operations and cash flows. However, we are still in the process
of evaluating this standard with respect to its impact on nonfinancial assets and liabilities and therefore have not yet determined the impact that it will have on our financial statements upon full adoption.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB
Statement No. 115 (SFAS 159). SFAS 159 permits entities to measure many financial instruments and certain other items at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each
subsequent reporting date. SFAS 159 also establishes presentation and disclosure requirements. The requirements of SFAS 159 are effective for our fiscal year beginning December 30, 2007. The Company is still evaluating the impact of adopting
SFAS 159, however, we do not believe that the adoption of this statement will have a material impact on our financial condition, results of operations and cash flows.

3. ACQUISITION OF THE COMPANY

On October 25, 2006, the Predecessor announced that it had entered into a definitive
merger agreement (the Merger Agreement) under which affiliates of MDP, a private equity investment firm, agreed to acquire all of the outstanding shares of the Predecessor for $34.75 per share in cash. The Board of Directors and
shareholders of the Predecessor approved the Merger Agreement. The transaction closed on February 6, 2007 (the Effective Date).

On the
effective date, Holdings acquired all of the outstanding capital stock of the Predecessor for $1,413,527 in cash. Holdings is owned by affiliates of MDP and certain members of the Companys senior management and has no operations. MDPs
objective is to invest in companies with strong competitive characteristics that it believes have potential for long-term equity appreciation. The Successor and Yankee Acquisition Corp. (the Merger Sub) are corporations formed by
Holdings in connection with the acquisition and, concurrently with the closing of the offering of the notes (described below) and the acquisition on February 6, 2007, the Merger Sub merged with and into The Yankee Candle Company, Inc., which
was the surviving corporation and assumed the obligations of the Merger Sub under the notes and related indentures by operation of law. The agreement and plan of merger and related documents resulted in the following events, which are collectively
referred to as the Transactions:



| |  |  | the purchase by the equity investors of class A and class B common units of Holdings for approximately $433,071 in cash (Holdings contributed the $433,071 to Parent
immediately prior to the closing; Parent in turn contributed the $433,071 to Merger Sub);
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Company paid MDP a fee of $15,000 and recorded the payment as a reduction in proceeds from common stock in connection with the costs of raising equity;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the entering into by the Merger Sub of a senior secured credit facility consisting of a $650,000 funded senior secured term loan and $125,000 senior secured
revolving credit facility, which are discussed in Note 11;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the offering by the Merger Sub of $325,000 of senior notes and $200,000 of senior subordinated notes, which are discussed in Note 11;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the refinancing of the Predecessors existing indebtedness, which was $140,000 as of February 6, 2007;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the merger of the Merger Sub with and into the Predecessor, with the Predecessor as the surviving corporation, and the payment of $1,413,527 as merger
consideration; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the payment of $52,925 of fees and expenses related to the transactions, including $4,602 of fees expensed.
| | - |  | -----------------------------------------------------------------------------------------------------------



11



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Immediately following the Merger, The Yankee Candle Company, Inc. became a whollyowned subsidiary of the Parent and
a whollyowned indirect subsidiary of Holdings and the equity investors indirectly own all of the Companys outstanding equity interests.

The
purchase price of the Company has been allocated to the assets and liabilities acquired based on their estimated fair market values at the date of acquisition as described in Note 4, Purchase Accounting.

The consolidated balance sheet as of December 29, 2007 and the consolidated statements of operations, stockholders equity and cash flows for the period
February 6, 2007 to December 29, 2007 show the operations of the Successor. The consolidated balance sheet as of December 30, 2006 and the consolidated statements of operations, stockholders equity and cash flows for the period
December 31, 2006 to February 5, 2007 and the fifty-two weeks ended December 30, 2006 and December 31, 2005 are operations of the Predecessor.

As a result of the consummation of the Transactions and the application of purchase accounting as of February 6, 2007, the consolidated financial statements for the period after February 5, 2007 are presented on a different basis
than that for the periods before February 6, 2007 and therefore are not comparable to prior periods.

4. PURCHASE ACCOUNTING

The Transactions have been accounted for as a purchase in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, whereby the purchase price paid to effect the Transactions was allocated to record acquired assets and liabilities at fair value. The Transactions and the allocation of the purchase price have been recorded as of February 6,
2007. The purchase price was $1,429,476.

Independent third-party appraisers were engaged to assist management and perform valuations of certain tangible
and intangible assets acquired and liabilities assumed. The Company recorded purchase accounting adjustments to increase the carrying value of property and equipment and inventory, to establish intangible assets for tradenames, customer lists and
favorable lease commitments and to revalue the Companys long-term deferred rent obligation, among other items.

Allocation of the purchase price for
the acquisition of the Company is based on estimates of the fair value of net assets acquired. The purchase price has been allocated as follows (in thousands):



|                                              |  |   |           |  
|--------------------------------------------- |  | - | --------- | -
|Cash consideration purchase price:            |  |   |           |  
|Paid to shareholders                          |  | $ | 1,413,527 |  
|Transaction costs                             |  |   | 15,949    |  
|                                              |  |   |           |  
|                                              |  |   | 1,429,476 |  
|                                              |  |   |           |  
|Net assets acquired:                          |  |   |           |  
|Inventory                                     |  |   | 107,357   |  
|Property and equipment                        |  |   | 154,995   |  
|Trade receivables                             |  |   | 33,614    |  
|Other assets                                  |  |   | 14,960    |  
|Record intangible assets acquired:            |  |   |           |  
|Tradenames                                    |  |   | 359,808   |  
|Customer lists                                |  |   | 64,700    |  
|Favorable lease agreements                    |  |   | 2,330     |  
|Unfavorable lease agreements                  |  |   | (8,652    | )
|Current liabilities assumed                   |  |   | (136,640  | )
|Tax impact of purchase accounting adjustments |  |   | (182,753  | )
|                                              |  |   |           |  
|Net assets acquired at fair value             |  |   | 409,719   |  
|                                              |  |   |           |  
|Goodwill                                      |  | $ | 1,019,757 |  
|                                              |  |   |           |  

Goodwill as a result of this transaction is not deductible for tax purposes. See Note 9, Goodwill and
Intangible Assets, to the consolidated financial statements for additional information.

Total fees and expenses related to the Transactions were
approximately $52,925, consisting of approximately $4,602 of indirect transaction costs which were expensed, $15,949 of direct acquisition costs of the Company and $32,374 of deferred financing costs. Such fees include commitment, placement,
financial advisory and other transaction fees as well as legal, accounting and other professional fees. The direct acquisition costs are included in the purchase price and are a component



12



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of goodwill. Deferred financing costs are comprised of approximately $15,171 related to the senior secured credit facility, which are amortized over 7 years,
$10,170 related to the senior notes, which are amortized over 8 years and $7,033 related to the senior subordinated notes, which are amortized over 10 years. See Note 11, Long-Term Debt, for a complete description of the senior secured
credit facility, senior notes and senior subordinated notes.

The unaudited pro forma results of operations provided below for the fifty-two weeks ended
December 29, 2007 and December 30, 2006 are presented as though the Transaction had occurred at the beginning of the periods presented, after giving effect to purchase accounting adjustments relating to depreciation and amortization of
revalued assets, interest expense associated with the senior secured credit facility, senior notes and senior subordinated notes as well as other acquisition related adjustments in connection with the Transactions. The pro forma results of
operations are not necessarily indicative of the combined results that would have occurred had the Transactions been consummated at the beginning of the earliest period presented, or are they necessarily indicative of future operating results.



|                  |  |                       |         |                  |   |         |  
|----------------- |  | --------------------- | ------- | ---------------- | - | ------- | -
|                  |  | Fifty-two Weeks Ended |        
|                  |  | December 29,2007      |         | December 30,2006 |  
|Net sales         |  | $                     | 736,955 |                  | $ | 687,557 |  
|Net income (loss) |  | $                     | 17,499  |                  | $ | (2,098  | )

5. EQUITY-BASED COMPENSATION

As discussed in Note 2, Summary of Significant Accounting Policies, in 2006, the Company adopted SFAS 123(R) using the modified prospective method. During fiscal 2006, the incremental share-based compensation expense due to the
adoption of SFAS 123(R), which was primarily related to charges on options granted prior to fiscal 2003 which were previously accounted for under the intrinsic value method, caused income before income taxes to decrease by approximately $294 and net
income to decrease by approximately $179. Share-based compensation cost recognized in the fifty-two weeks ended December 30, 2006 represents compensation cost for all share-based payments granted prior to December 30, 2006 based upon the
grant date fair values estimated in accordance with the provisions of SFAS 123(R) or SFAS 123 depending upon the date of grant. Share-based compensation cost recognized in the fifty-two weeks ended December 31, 2005 includes compensation cost
for all share-based payments granted between January 1, 2003 and December 31, 2005, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123.

Awards under the Predecessors former option plans vest, in general, over a four year period. Therefore, the cost related to stock-based employee compensation
included in the determination of net income for periods prior to the fifty-two weeks ended December 30, 2006 presented in the Predecessors historical consolidated statements of operations is less than that which would have been recognized
if the fair value based method had been applied to all awards since the original effective date of SFAS 123. The following table illustrates the effect on net income if the fair value based method had been applied to all outstanding and unvested
awards in fiscal 2005.



|                                                                                                                                            |  |                  |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------ | -
|                                                                                                                                            |  | December 31,2005 |       
|Net income, as reported                                                                                                                     |  | $                | 78,101 |  
|Add: Employee stock-based compensation expense included in reported net income, net of related tax effects                                  |  |                  | 2,086  |  
|Deduct: Total employee stock-based compensation expense determined under fair value based method for all awards, net of related tax effects |  |                  | (2,603 | )
|                                                                                                                                            |  |                  |        |  
|Pro forma net income                                                                                                                        |  | $                | 77,584 |  
|                                                                                                                                            |  |                  |        |  

Sharebased Compensation PlansPredecessor

Prior to the completion of the Merger, the Predecessor granted stock options, restricted stock and performance share awards to key employees and directors under
sharebased compensation plans. The exercise price of the options was typically determined by the actual closing price of the Predecessors common stock as quoted by the NYSE on the last business day before the date of grant. Compensation
expense for restricted stock awards was measured at fair value on the date of the grant based on the number of shares granted and the quoted market price of the Predecessors common stock. Such value was recognized as expense over the vesting
period of the award adjusted for actual forfeitures. The performance share grants were valued on the grant date by multiplying the number of performance shares covered by the awards that were



13



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expected to vest by the Predecessors closing stock price on the grant date. The cost was recognized within the consolidated statements of operations on
a straight line basis over the period specified in the award (generally three years for each grant) based upon the number of shares which were considered probable of vesting.

Under the terms of the Merger Agreement, each outstanding share of the Predecessors common stock was converted into a right to receive an amount in cash, without interest, of $34.75 (the Merger
Consideration). In this regard, with respect to the Predecessors outstanding stock option grants and restricted stock and performance share awards, in accordance with the terms of the Merger Agreement, the Predecessors equity plan
documents and various actions taken by its Board of Directors:



| |  |  | all options outstanding immediately prior to the effective date of the Merger, whether or not then vested or exercisable, were canceled as of such effective date,
with each holder of an option receiving for each share of common stock subject to the option, an amount equal to the Merger Consideration less the per share exercise price of such option;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | all shares of restricted stock outstanding immediately prior to the effective date of the Merger vested and became free of restrictions as of such effective date
and each such share of restricted stock was converted into a right to receive the Merger Consideration; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | immediately prior to the effective date of the Merger, the Predecessor issued to each holder of a performance share award the following number of shares of common
stock: (i) with respect to the performance share award covering fiscal years 20042006, a number of shares equal to 60% of the target number of each recipients performance share award, (ii) with respect to the performance share
award covering fiscal years 20052007, a number of shares equal to 66.67% of the target number of each recipients performance share award, and (iii) with respect to the performance share award covering fiscal years 20062008, a
number of shares equal to 33.33% of the target number of each recipients performance share award. In connection with the closing of the Merger, each holder received the Merger Consideration for each share of common stock so issued.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following is a summary of activity related to the stock options, restricted shares and performance shares that were in effect
through the effective date of the Merger, when all of the stock options were exercised and the restricted shares and performance share units were issued:



|                                                              |  |                                 |           |                  |   |           |  |                                |  |  
|------------------------------------------------------------- |  | ------------------------------- | --------- | ---------------- | - | --------- |  | ------------------------------ |  | -
|Predecessors Plan                                            |  | Outstanding atDecember 30, 2006 |           | Exercised/Issued |   | Cancelled |  | Outstanding atFebruary 6, 2007
|Stock options                                                 |  |                                 |           |                  |   |           |  |                                |  |  
|1998 Plan                                                     |  |                                 | 62,559    |                  |   | 62,559    |  |                               |  | 
|1999 Plan                                                     |  |                                 | 1,499,275 |                  |   | 1,481,025 |  | 18,250                         |  | 
|2005 Plan                                                     |  |                                 | 395,950   |                  |   | 385,950   |  | 10,000                         |  | 
|                                                              |  |                                 |           |                  |   |           |  |                                |  |  
|Total options outstanding                                     |  |                                 | 1,957,784 |                  |   | 1,929,534 |  | 28,250                         |  | 
|                                                              |  |                                 |           |                  |   |           |  |                                |  |  
|Weighted average exercise price per option                    |  | $                               | 23.74     |                  | $ | 25.20     |  |                                |  |  
|Weighted average remaining contractual term per option        |  |                                 | 6.9 years |                  |   |           |  |                                |  |  
|                                                              |  |                                 |           |                 
|Restricted shares                                             |  |                                 |           |                  |   |           |  |                                |  |  
|2005 Plan                                                     |  |                                 | 93,700    |                  |   | 93,700    |  |                               |  | 
|                                                              |  |                                 |           |                  |   |           |  |                                |  |  
|Weighted average fair market value per share at date of award |  | $                               | 29.69     |                  | $ | 29.69     |  |                                |  |  
|Weighted average remaining restriction period                 |  |                                 | 2.2 years |                  |   |           |  |                                |  |  
|                                                              |  |                                 |           |                 
|Performance shares                                            |  |                                 |           |                  |   |           |  |                                |  |  
|2005 Plan                                                     |  |                                 | 211,275   |                  |   | 211,275   |  |                               |  | 
|                                                              |  |                                 |           |                  |   |           |  |                                |  |  
|Weighted average fair market value per share at date of award |  | $                               | 30.69     |                  | $ | 30.69     |  |                                |  |  
|Weighted average remaining restriction period                 |  |                                 | 1.2 years |                  |   |           |  |                                |  |  

Share-based compensation charges amounted to $8,638, $5,772 and $3,418 for the period December 31, 2006 to
February 5, 2007 and the fifty-two weeks ended December 30, 2006 and December 31, 2005, respectively. There were no share based grants during the period December 31, 2006 to February 5, 2007. The weighted average
grantdate fair value of options, restricted shares and performance shares granted during fiscal 2006 was $8.15 and $27.62, respectively. The weighted average grantdate fair value of options, restricted shares and performance shares
granted during fiscal 2005 was $8.41 and $33.16, respectively.



14



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The total intrinsic value of stock options exercised during the period December 31, 2006 to February 5, 2007
was $21,252. The total intrinsic value of stock options exercised during the fifty-two weeks ended December 30, 2006 and December 31, 2005 was $3,476 and $2,938, respectively. The total fair value of shares that vested during the period
December 31, 2006 to February 5, 2007 and the fifty-two weeks ended December 30, 2006 and December 31, 2005 was $96, $9,328 and $7,782, respectively.

A summary of the status of option grants and changes during the period ending on February 6, 2007 are presented below:



|                               |  |               |  |                   |      |                    |        |               |   |       |  |               |  |   |      
|------------------------------ |  | ------------- |  | ----------------- | ---- | ------------------ | ------ | ------------- | - | ----- |  | ------------- |  | - | -----
|                               |  | Stock Options |  | Restricted Shares |      | Performance Shares
|Predecessor                    |  | Options       |  | FairValue (1)     |      | Options            |        | FairValue (1) |   | Units |  | FairValue (1)
|Nonvested at December 31, 2006 |  | 852,889       |  | $                 | 8.06 |                    | 93,700 |               | $ | 34.31 |  | 147,750       |  | $ | 34.31
|Grants                         |  |              |  |                   |     |                    |       |               |   |      |  |              |  |   |     
|Vested(2)                      |  | 852,889       |  |                   | 8.06 |                    | 93,700 |               |   | 34.31 |  | 147,750       |  |   | 34.31
|Cancelled                      |  |              |  |                   |     |                    |       |               |   |      |  |              |  |   |     
|                               |  |               |  |                   |      |                    |        |               |   |       |  |               |  |   |      
|Nonvested at February 6, 2007  |  |              |  | $                 |     |                    |       |               | $ |      |  |              |  | $ |     
|                               |  |               |  |                   |      |                    |        |               |   |       |  |               |  |   |      



|(1) | Represents the weighted average grant date fair value per share-based unit, using the Black-Scholes option pricing model for stock options and average December 29, 2006
high/low market price of the Predecessors common stock for restricted and performance shares.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | All of the share based units became immediately vested on the date of the Merger.
|--- | ---------------------------------------------------------------------------------

As of February 5, 2007, there was approximately $5,238 of total unrecognized compensation cost related to stock option grants and $2,930 of total unrecognized compensation costs related to restricted shares and performance shares
awards, under stockbased compensation plans. The consummation of the Merger accelerated the recognition of compensation cost, and accordingly, all of this cost was included in general and administrative expense in the consolidated statements
of operations for the period from December 31, 2006 to February 5, 2007 (Predecessor).

Equity-based Compensation Plans-Successor

Effective as of the closing of the Transactions, all of the prior equity plans of the Predecessor ceased to be effective and all existing equity grants
and awards were paid out as described above. In connection with the Transactions, the Company entered into equity arrangements with certain members of senior management of the Company (Management Investors). The equity consists of
ownership interests in Holdings. At the time of the Transactions there were two classes of these ownership interests: Class A common units and Class B common units. The Class A and Class B common units were issued to and purchased by the
Management Investors under the YCC Holdings LLC 2007 Incentive Equity Plan adopted on February 6, 2007 (the Plan). The Plan grants the Board authorization to issue up to 593,622 Class B common units. The rights and obligations of
Holdings and the holders of its Class A and Class B common units are generally set forth in Holdings limited liability company agreement, Holdings unitholders agreement and the individual Class A and Class B unit purchase
agreements entered into with the respective unitholders (the equity agreements).

Upon closing of the Transactions, certain eligible Management
Investors purchased 40,933 Class A common units (approximately 0.96% of Holdings Class A common units). The remaining 4,233,353 Class A common units were purchased by MDP in connection with the consummation of the Transactions.
The purchase price paid by the Management Investors for the Class A common units was $101.22 per unit, the same as that paid by MDP in connection with MDPs purchase of its Class A common units. The Class A common units are not
subject to vesting. Each Management Investor has the right to require the Company to repurchase the Class A common units at original cost if the Company terminates him or her without cause or he or she resigns for good reason prior to the
second anniversary of the closing of the Transactions.

Additionally, the Board approved the issuance of 474,897 shares of Class B common units. Pursuant
to the Plan the Management Investors purchased 427,643 Class B common units of Holdings (representing approximately 9.9% of the residual equity interest of Holdings). The remainder of the Class B common units were available for issuance to eligible
participants under the Plan. The Class B common units were purchased at a cost of $1.00 per unit. The Class B common



15



---

units are subject to a five-year vesting period, with 10% of the units vesting immediately upon the date of purchase and the remainder generally vesting
daily beginning on the sixth month anniversary of the purchase date, continuing over the subsequent 54 month period. If the Management Investors employment is terminated as a result of death or disability, an additional amount of Class B
common units equal to the lesser of (i) twenty percent (20%) of the aggregate number of units held by such Management Investor and (ii) the remainder of the Management Investors unvested units, shall automatically become vested
units. All unvested Class B common units will vest upon a sale of all or substantially all of the business to an independent third party so long as the employee holding such units continues to be an employee of the Company at the closing of the
sale. Class B common units are also subject to the right of Holdings or, if not exercised by Holdings, of MDP, to repurchase such Class B common units upon a termination of employment, as more fully set forth in the equity agreements.

In October 2007, the Compensation Committee approved the creation of a new class of equity interest in Holdings, Class C common units, for future issuance to eligible
participants under the Management Equity Plan. As approved by the Compensation Committee, the number of remaining authorized and unissued Class B common units would be reduced by any Class C common unit grants actually made, and the number of
combined Class B common units and Class C common units could not exceed the initial pool of Class B common units originally reserved in connection with the merger.

Class C common units will otherwise have the same general characteristics as Class B common units, including with respect to time vesting and repurchase terms (except that unvested Class C common units are forfeited rather than repurchased
as there is no initial capital outlay for the Class C common units). The Company currently anticipates that all future long-term equity incentive grants will be made using Class C common units.

Class A, Class B and Class C common units are all subject to various restrictions on transfer and other conditions, all as more fully set forth in the equity
agreements. Holdings may issue additional units subject to the terms and conditions of certain of the equity agreements.

As of December 29, 2007,
shares outstanding were as follows:



|                                                        |  |                    |           |     |                    |   |         |                    |  |   |      
|------------------------------------------------------- |  | ------------------ | --------- | --- | ------------------ | - | ------- | ------------------ |  | - | -----
|                                                        |  | Class ACommonUnits |           |     | Class BCommonUnits |   |         | Class CCommonUnits
|Outstanding at February 6, 2007                         |  |                    | 4,274,286 | (1) |                    |   | 427,643 |                    |  |   |     
|Granted                                                 |  |                    |          |     |                    |   | 12,086  |                    |  |   | 475  
|Forfeited                                               |  |                    |          |     |                    |   | (36,544 | )                  |  |   |     
|Repurchased                                             |  |                    | (2,571    | )   |                    |   |        |                    |  |   |     
|                                                        |  |                    |           |     |                    |   |         |                    |  |   |      
|Outstanding at December 29, 2007                        |  |                    | 4,271,715 |     |                    |   | 403,185 |                    |  |   | 475  
|                                                        |  |                    |           |     |                    |   |         |                    |  |   |      
|Vested at December 29, 2007                             |  |                    | 4,271,715 |     |                    |   | 75,348  |                    |  |   | 47   
|                                                        |  |                    |           |     |                    |   |         |                    |  |   |      
|Purchase price of award                                 |  | $                  | 101.22    |     |                    | $ | 1.00    |                    |  |   |     
|Estimated fair market value of award, under SFAS 123(R) |  | $                  | 99.60     | (2) |                    | $ | 10.39   |                    |  | $ | 18.55



|(1) | 4,233,353 Class A common units were purchased by MDP; 40,933 by management investors.
|--- | -------------------------------------------------------------------------------------

|(2) | Implied value based upon valuation of the Class B common units and the total equity value of $433,071.
|--- | ------------------------------------------------------------------------------------------------------

The total estimated fair value of equity awards vested during the period from February 6, 2007 to December 29, 2007 was approximately $784. Share-based compensation charges recognized for the period
February 6, 2007 to December 29, 2007 was $670.

As of December 29, 2007, there was approximately $3,092 of total unrecognized compensation
cost related to Class B and Class C common unit equity awards and there is no expense related to the Class A common unit equity awards. This cost is expected to be recognized over the remaining vesting period, of approximately 59 months
(January 2008 to November 2012).



16



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Presented below is a comparative summary of assumptions for the indicated periods (there were no grants during the period
from December 31, 2006 to February 5, 2007 by the Predecessor):



|                                              |  |                                                                              |       |      |  |  |                                                    |   |      |   |  |                                                    |  |   |      |  
|--------------------------------------------- |  | ---------------------------------------------------------------------------- | ----- | ---- |  |  | -------------------------------------------------- | - | ---- | - |  | -------------------------------------------------- |  | - | ---- | -
|                                              |  | Successor                                                                    |       |      |  |  | Predecessor                                        |   |      |   |  | Predecessor                                        | 
|Assumptions                                   |  | PeriodFebruary 6, 2007to December 29, 2007Option
PricingMethod Black-Scholes |       |      |  |  | Fifty-twoWeeks EndedDecember 30, 2006Black-Scholes |   |      |   |  | Fifty-twoWeeks EndedDecember 31, 2005Black-Scholes | 
|Weighted average fair value of awards granted |  | $                                                                            | 10.40 |      |  |  |                                                    | $ | 8.15 |   |  |                                                    |  | $ | 8.41 |  
|Expected volatility                           |  |                                                                              | N/A   | (1)  |  |  |                                                    |   | 26.0 | % |  |                                                    |  |   | 27.0 | %
|Weighted average volatility                   |  |                                                                              | 30.0  | %(1) |  |  |                                                    |   | 26.0 | % |  |                                                    |  |   | 27.0 | %
|Weighted average expected term (in years)     |  |                                                                              | 5.0   |      |  |  |                                                    |   | 4.8  |   |  |                                                    |  |   | 4.0  |  
|Dividend yield                                |  |                                                                              |      |      |  |  |                                                    |   | 1.0  | % |  |                                                    |  |   | 0.0  | %
|Weighted average risk-free interest rate      |  |                                                                              | 4.7   | %    |  |  |                                                    |   | 4.8  | % |  |                                                    |  |   | 4.0  | %
|Weighted average expected annual forfeiture   |  |                                                                              | 10.0  | %    |  |  |                                                    |   | 3.5  | % |  |                                                    |  |   | N/A  |  



|(1) | The Company used a five-year annualized historical volatility of guideline companies.
|--- | -------------------------------------------------------------------------------------

With respect to the Class B and Class C common units, since the Company is no longer publicly traded, the Company based its estimate of expected volatility on the average historical volatility of a group of six
comparable companies. The historical volatilities of the comparable companies were measured over a 5-year historical period. The Companys historical volatility prior to the acquisition was also considered in the estimate of expected
volatility. The expected term of the Class B and Class C common units granted represents the period of time that the units are expected to be outstanding and is assumed to be 5 years. The Company is not expected to pay dividends, and accordingly,
the dividend yield is zero. The risk free interest rate for a period commensurate with the expected term was based on the U.S. Treasury yield curve in effect at the time of issuance.

6. INVENTORIES

The Predecessor valued its inventories on the lastin firstout (LIFO) basis. The
Successor has elected to value its inventories using the firstin firstout (FIFO) basis. As a result of the Merger, purchase accounting adjustments of $43,452 were recorded to increase inventories to estimated fair value.
During the period February 6, 2007 to December 29, 2007 approximately $40,472 of the increase has been recorded as a cost of sale in the consolidated statement of operations as the related inventory was sold. The remainder of the purchase
accounting adjustment is attributed to a change in the basis of accounting from LIFO to FIFO.

The components of inventory were as follows:



|                            |  |                  |        |  |  |                  |   |        |  
|--------------------------- |  | ---------------- | ------ |  |  | ---------------- | - | ------ | -
|                            |  | Successor        |        |  |  | Predecessor      |  
|                            |  | December 29,2007 |        |  |  | December 30,2006 |  
|Finished goods              |  | $                | 62,723 |  |  |                  | $ | 58,143 |  
|Work-in-process             |  |                  | 559    |  |  |                  |   |       |  
|Raw materials and packaging |  |                  | 6,681  |  |  |                  |   | 5,967  |  
|                            |  |                  |        |  |  |                  |   |        |  
|                            |  |                  | 69,963 |  |  |                  |   | 64,110 |  
|Less LIFO adjustment        |  |                  |       |  |  |                  |   | (2,980 | )
|                            |  |                  |        |  |  |                  |   |        |  
|                            |  | $                | 69,963 |  |  |                  | $ | 61,130 |  
|                            |  |                  |        |  |  |                  |   |        |  



17



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7. PROPERTY AND EQUIPMENT

The components of property and equipment were as follows:



|                                                |  |                  |         |   |                  |   |          |  
|----------------------------------------------- |  | ---------------- | ------- | - | ---------------- | - | -------- | -
|                                                |  | December 29,2007 |         |   | December 30,2006 |  
|Land and improvements                           |  | $                | 7,918   |   |                  | $ | 6,330    |  
|Buildings and improvements                      |  |                  | 95,708  |   |                  |   | 121,468  |  
|Computer equipment                              |  |                  | 21,827  |   |                  |   | 48,412   |  
|Furniture and fixtures                          |  |                  | 30,245  |   |                  |   | 49,295   |  
|Equipment                                       |  |                  | 20,999  |   |                  |   | 36,354   |  
|Vehicles                                        |  |                  | 53      |   |                  |   | 343      |  
|Construction in progress                        |  |                  | 4,847   |   |                  |   | 7,889    |  
|                                                |  |                  |         |   |                  |   |          |  
|Total                                           |  |                  | 181,597 |   |                  |   | 270,091  |  
|Less: accumulated depreciation and amortization |  |                  | (25,686 | ) |                  |   | (129,488 | )
|                                                |  |                  |         |   |                  |   |          |  
|                                                |  | $                | 155,911 |   |                  | $ | 140,603  |  
|                                                |  |                  |         |   |                  |   |          |  

Depreciation and amortization expense related to property and equipment was $2,504 and $26,020 for the periods
December 31, 2006 to February 5, 2007 and February 6, 2007 to December 29, 2007, respectively. For the fifty-two weeks ended December 30, 2006 and December 31, 2005, $24,984 and $23,325, respectively, was recognized in
depreciation and amortization expense related to property and equipment. For the periods December 31, 2006 to February 5, 2007 and February 6, 2007 to December 29, 2007, $15 and $215, respectively, of interest was capitalized. In
addition, $128 and $336 of interest was capitalized in the fifty-two weeks ended December 30, 2006 and December 31, 2005, respectively.

8.
BUSINESS ACQUISITIONS

On July 30, 2006, the Company acquired certain assets of Candle
Acquisition Corp. (Illuminations), in an effort to build on its strategy to profitably build its business model by focusing on the Companys core competency of premium candles. In addition, the acquisition will enhance the
Companys ability to penetrate the West Coast and urban markets. The acquisition included the Illuminations® brand, 14 Illuminations retail stores located in California, Arizona and
Washington, and the Illuminations Consumer Direct business. Illuminations designs and markets premium scented candles, candle accessories, and other home decor products through retail satellite stores and the consumer direct channel. The total cash
purchase price was approximately $22,244. The cash purchase price was borrowed under the Companys $100,000 unsecured credit facility. The following table provides an allocation of the purchase price for the acquired assets of Illuminations:



|                              |  |   |        |  
|----------------------------- |  | - | ------ | -
|Cash purchase price           |  | $ | 22,244 |  
|Assets acquired:              |  |   |        |  
|Property, plant and equipment |  |   | 2,010  |  
|Inventory                     |  |   | 2,666  |  
|Favorable lease agreements    |  |   | 877    |  
|Tradename                     |  |   | 10,100 |  
|Goodwill                      |  |   | 6,484  |  
|Other assets                  |  |   | 312    |  
|                              |  |   |        |  
|Total assets acquired:        |  |   | 22,449 |  
|Liabilities acquired:         |  |   |        |  
|Gift card liability           |  |   | (205   | )
|                              |  |   |        |  
|Total                         |  | $ | 22,244 |  
|                              |  |   |        |  

The favorable lease agreements were being amortized over the remaining lease terms of the related leases, prior to
the Company being acquired on February 6, 2007. The Company plans to continue to sell the Illuminations branded products and utilize the Illuminations brand name. Accordingly, the tradename is deemed to have an indefinite life and is not being
amortized. The goodwill as a result of this transaction is tax deductible over a 15 year period and tax attributes have been carried over into the Successor. For segment reporting purposes, Illuminations is included in the Retail segment.



18



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Illuminations results of operations were immaterial to the Companys operations during fiscal 2006 and,
therefore historical pro forma results of operations have not been provided.

On November 7, 2005, the Company acquired substantially all of the
assets of Aroma Naturals, Inc. (Aroma Naturals) to expand the Companys core product line. Aroma Naturals was a privately owned and operated company specializing in developing plant and flower aromas into aromatherapy products. The
total cash purchase price was approximately $4,180. The cash purchase price was borrowed under the Companys $250,000 unsecured credit facility. The following table provides an allocation of the purchase price for the acquired assets of Aroma
Naturals:



|                              |  |   |      
|----------------------------- |  | - | -----
|Cash purchase price           |  | $ | 4,180
|Assets acquired:              |  |   |      
|Property, plant and equipment |  |   | 25   
|Non-compete agreements        |  |   | 160  
|Inventory                     |  |   | 619  
|Customer list                 |  |   | 720  
|Tradename                     |  |   | 560  
|Goodwill                      |  |   | 2,096
|                              |  |   |      
|Total                         |  | $ | 4,180
|                              |  |   |      

The customer list and non-compete assets were being amortized over their estimated useful lives of four years,
prior to the Company being acquired on February 6, 2007. The Company plans to continue to sell the Aroma Naturals branded products and, accordingly, the tradename is deemed to have an indefinite life and is not being amortized. The goodwill as
a result of this transaction is tax deductible over a 15 year period and tax attributes have been carried over into the Successor. For segment reporting purposes, Aroma Naturals is included in the Wholesale segment. Aroma Naturals results of
operations were immaterial to the Companys operations during the fifty-two weeks ended December 31, 2005 and, therefore, historical pro forma results of operations have not been provided.

9. GOODWILL AND INTANGIBLE ASSETS

Intangible Assets

In connection with the Transactions, the Companys intangible assets were valued by management with the assistance of valuation specialists. The carrying amount and
accumulated amortization of intangible assets consisted of the following:



|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|------------------------------------ |  | ------------------------------------ |  | ------------------- | ------- | ----------------------- | - | ------- | ------------ |  | - | -------
|                                     |  | WeightedAverageUseful Life(in years) |  | GrossCarryingAmount |         | AccumulatedAmortization |   |         | NetBookValue
|Successor                            |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|December 29, 2007                    |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Indefinite life:                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Tradenames                           |  | N/A                                  |  | $                   | 359,862 |                         | $ |        |              |  | $ | 359,862
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Finite-lived intangible assets:      |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Customer lists                       |  | 5                                    |  |                     | 64,700  |                         |   | (12,081 | )            |  |   | 52,619 
|Favorable lease agreements           |  | 5                                    |  |                     | 2,330   |                         |   | (592    | )            |  |   | 1,738  
|Other                                |  | 3                                    |  |                     | 36      |                         |   | (13     | )            |  |   | 23     
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Total finite-lived intangible assets |  |                                      |  |                     | 67,066  |                         |   | (12,686 | )            |  |   | 54,380 
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Total intangible assets              |  |                                      |  | $                   | 426,928 |                         | $ | (12,686 | )            |  | $ | 414,242
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Predecessor                          |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|December 30, 2006                    |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Indefinite life:                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Tradenames                           |  | N/A                                  |  | $                   | 12,620  |                         | $ |        |              |  | $ | 12,620 
|Finite-lived intangible assets:      |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Customer lists                       |  | 4                                    |  |                     | 3,880   |                         |   | (2,251  | )            |  |   | 1,629  
|Favorable lease agreements           |  | 4                                    |  |                     | 877     |                         |   | (186    | )            |  |   | 691    
|Non-competes                         |  | 3-4                                  |  |                     | 1,123   |                         |   | (656    | )            |  |   | 467    
|Formulas                             |  | 3                                    |  |                     | 431     |                         |   | (252    | )            |  |   | 179    
|Other                                |  | 15                                   |  |                     | 231     |                         |   | (193    | )            |  |   | 38     
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Total finite-lived intangible assets |  |                                      |  |                     | 6,542   |                         |   | (3,538  | )            |  |   | 3,004  
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        
|Total intangible assets              |  |                                      |  | $                   | 19,162  |                         | $ | (3,538  | )            |  | $ | 15,624 
|                                     |  |                                      |  |                     |         |                         |   |         |              |  |   |        



19



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Total amortization expense from finitelived intangible assets was $12,686 for the period February 6, 2007 to
December 29, 2007 and $178 for the period December 31, 2006 to February 5, 2007. Total amortization expense from finitelived intangible assets was $1,531 and $1,198 for the fifty-two weeks ended December 30, 2006 and
December 31, 2005, respectively. The intangible assets are amortized on a straight line basis. Favorable lease agreements are amortized over the remaining lease term of each respective lease.

Aggregate amortization expense related to intangible assets at December 29, 2007 in each of the next five fiscal years and thereafter is expected to be as follows:



|           |  |   |       
|---------- |  | - | ------
|2008       |  | $ | 13,914
|2009       |  |   | 13,761
|2010       |  |   | 12,645
|2011       |  |   | 12,499
|2012       |  |   | 1,353 
|Thereafter |  |   | 208   
|           |  |   |       
|Total      |  | $ | 54,380
|           |  |   |       

Goodwill

The
Company has two reportable segments  retail and wholesale. In connection with the Transactions, the Company recorded goodwill in the amount of $1,019,757. This goodwill was allocated to retail in the amount of $354,937 and wholesale in the
amount of $664,820. Subsequent to the Transactions an additional $225 of goodwill was recorded in relation to an additional purchase price payment related to the Aroma Naturals acquisition. This payment was accrued in the fourth quarter of 2007 for
payment to be made in 2008. Aroma Naturals is reported within the wholesale segment.

Goodwill is non-amortizable but is subject to annual impairment tests
in accordance with SFAS 142. The Company completed its annual impairment testing of goodwill and indefinite-lived intangible assets as of November 3, 2007 and no impairment was recorded as a result of these tests.

10. CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at
several financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100. Uninsured balances aggregated $3,336 and $20,247 at December 29, 2007 and December 30, 2006, respectively.
The Company extends credit to its wholesale customers. For the periods February 6, 2007 to December 29, 2007 and December 31, 2006 to February 5, 2007 no single customer accounted for more than 10% of total sales. For the
fifty-two weeks ended December 30, 2006 and December 31, 2005, no single customer accounted for more than 10% of total sales.

11. LONG-TERM DEBT

Long-term debt and credit arrangements consisted of the following at December 29, 2007 and December 30, 2006:



|                                         |  |                  |           |  |  |                  |   |        
|---------------------------------------- |  | ---------------- | --------- |  |  | ---------------- | - | -------
|                                         |  | Successor        |           |  |  | Predecessor     
|                                         |  | December 29,2007 |           |  |  | December 30,2006
|Senior secured revolving credit facility |  | $                | 5,000     |  |  |                  | $ |       
|Senior secured term loan facility        |  |                  | 600,125   |  |  |                  |   |       
|Senior notes due 2015                    |  |                  | 325,000   |  |  |                  |   |       
|Senior subordinated notes due 2017       |  |                  | 200,000   |  |  |                  |   |       
|Amended credit facility                  |  |                  |          |  |  |                  |   | 140,000
|                                         |  |                  |           |  |  |                  |   |        
|Total                                    |  |                  | 1,130,125 |  |  |                  |   | 140,000
|Less current portion                     |  |                  | 6,500     |  |  |                  |   |       
|                                         |  |                  |           |  |  |                  |   |        
|Long-term debt                           |  | $                | 1,123,625 |  |  |                  | $ | 140,000
|                                         |  |                  |           |  |  |                  |   |        



20



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Senior Secured Credit Facility

The Companys senior secured credit facility (the Credit Facility) consists of a $650,000 senior secured term loan facility maturing on February 6, 2014 and a $125,000 senior secured revolving
credit facility, which expires on February 6, 2013. The senior secured term loan facility was used by the Company to finance part of the Merger. The senior secured revolving credit facility is being used by the Company for, among other
purposes, working capital, letters of credit and other general corporate purposes.

All borrowings under the Credit Facility bear interest at a rate per
annum equal to an applicable margin, plus, at the Companys option, (i) the higher of (a) the prime rate (as set forth on the British Banking Association Telerate Page 5) and (b) the federal funds effective rate, plus one-half
percent (0.50%) per annum or (ii) the Eurodollar rate, and resets periodically. In addition to paying interest on outstanding principal under the senior secured credit facility, the Company is required to pay a commitment fee to the lenders in
respect of unutilized loan commitments at a rate of 0.50% per annum. As of December 29, 2007, the weighted average combined interest rate on the senior secured term loan facility and senior secured revolving credit facility was 6.87%.

All obligations under the Credit Facility are guaranteed by the Parent and each of the Companys present and future, direct and indirect,
whollyowned domestic restricted subsidiaries. In addition, the Credit Facility is secured by first priority perfected liens on all of the Companys capital stock and substantially all of the Companys existing and future material
assets and the existing and future material assets of the Companys guarantors, except that only up to 66% of the voting capital stock of the first tier foreign subsidiaries and 100% of the nonvoting capital stock of such foreign
subsidiaries will be pledged in favor of the senior secured credit facility and each of the guarantors assets.

The Credit Facility permits all or
any portion of the loans outstanding to be prepaid at any time and commitments to be terminated in whole or in part at our option without premium or penalty. The Company is required to repay amounts borrowed under the senior secured term loan
facility in equal quarterly installments in an aggregate annual amount equal to one percent (1.0%) of the original principal amount of the senior secured term loan facility with the balance being payable on the maturity date of the senior
secured term loan facility.

Subject to certain exceptions, the Credit Facility requires that 100% of the net proceeds from certain asset sales, casualty
insurance, condemnations and debt issuances, and 50% (subject to step downs) from excess cash flow, as defined, for each fiscal year must be used to pay down outstanding borrowings.

The Credit Facility and related agreements contain customary financial and other covenants, including, but not limited to, maximum consolidated total secured leverage (net of certain cash and cash equivalents) and
certain other limitations on the Company and certain of the Companys restricted subsidiaries, as defined in the Credit Facility, ability to incur additional debt, guarantee other obligations, grant liens on assets, make investments or
acquisitions, dispose of assets, make optional payments or modifications of other debt instruments, pay dividends or other payments on capital stock, engage in mergers or consolidations, enter into sale and leaseback transactions, enter into
arrangements that restrict the Companys ability to pay dividends or grant liens and engage in transactions with affiliates. The Credit Facility requires that the Company maintain at the end of each fiscal quarter, commencing with the quarter
ended December 29, 2007, a consolidated total secured debt (net of certain cash and cash equivalents) to consolidated EBITDA ratio of no more than 4.50 to 1.00. As of December 29, 2007, the consolidated total secured debt to consolidated
EBITDA ratio was 3.03 to 1.00.

As of December 29, 2007, $5,000 was outstanding under the senior secured revolving credit facility and there were
outstanding letters of credit of $2,030, leaving $117,970 in availability. As of December 29, 2007, the Company was in compliance with all covenants under the Credit Facility.

Senior Notes and Senior Subordinated Notes

The senior notes due 2015 bear interest at a per annum rate equal to
8.50%. Interest is paid every six months on February 15 and August 15, beginning on August 15, 2007. The senior subordinated notes due 2017 bear interest at a per annum rate equal to 9.75%. Interest is paid every six months on
February 15 and August 15, beginning on August 15, 2007. The senior notes mature on February 15, 2015 and the senior subordinated notes mature on February 15, 2017.

Obligations under the senior notes are guaranteed on an unsecured senior basis and obligations under the senior subordinated notes are guaranteed on an unsecured senior
subordinated basis, by Parent and the Companys existing and future domestic subsidiaries. If the Company cannot make any payment on either or both series of notes, the guarantors must make the payment instead.



21



---

In the event of certain change in control events specified in the indentures governing the notes, the Company must offer
to repurchase all or a portion of the notes at 101% of the principal amount of the exchange notes on the date of purchase, plus any accrued and unpaid interest to the date of repurchase.

Senior Notes Redemption Provisions  The senior note indenture permits the Company on or after February 15, 2011, to redeem all or a part of the senior notes at its option at the redemption prices set
forth below (expressed as a percentage of the principal amount), plus accrued and unpaid interest, on the senior notes to be redeemed to the applicable redemption date if redeemed during the twelve-month period beginning on February 15 of the
years indicated below:



|                    |  |            |  
|------------------- |  | ---------- | -
|Year                |  | Percentage |  
|2011                |  | 104.250    | %
|2012                |  | 102.125    | %
|2013 and thereafter |  | 100.000    | %

The senior notes may also be redeemed, in whole or in part, at any time prior to February 15, 2011, at a
redemption price equal to 100% of the principal amount of the senior notes redeemed plus a make whole premium calculated in accordance with the indenture plus accrued and unpaid interest to the applicable redemption date.

In addition, at any time prior to February 15, 2010, the Company under certain conditions may on one or more occasions redeem in the aggregate up to 35% of the
aggregate principal amount of the senior notes issued under the indenture with the net cash proceeds of one or more equity offerings, at a redemption price of 108.500% of the principal amount of the senior notes, plus accrued and unpaid interest, to
the redemption date provided such redemption occurs within 90 days after such equity offering.

Senior Subordinated Notes Redemption Provisions
 The senior subordinated note indenture permits the Company on or after February 15, 2012, to redeem all or a part of the senior subordinated notes at its option at the redemption prices set forth below (expressed as a percentage of the
principal amount), plus accrued and unpaid interest, on the Senior Notes to be redeemed to the applicable redemption date if redeemed during the twelve-month period beginning on February 15 of the years indicated below:



|                    |  |            |  
|------------------- |  | ---------- | -
|Year                |  | Percentage |  
|2012                |  | 104.875    | %
|2013                |  | 103.250    | %
|2014                |  | 101.625    | %
|2015 and thereafter |  | 100.000    | %

The senior subordinated notes may also be redeemed, in whole or in part, at any time prior to February 15,
2012, at a redemption price equal to 100% of the principal amount of the senior notes redeemed plus a make whole premium calculated in accordance with the indenture plus accrued and unpaid interest as defined within the indenture, to the applicable
redemption date.

In addition, at any time prior to February 15, 2010, the Company under certain conditions may on one or more occasions redeem in the
aggregate up to 35% of the aggregate principal amount of the senior subordinated notes issued under the indenture with the net cash proceeds of one or more equity offerings, at a redemption price of 109.750% of the principal amount of the senior
notes, plus accrued and unpaid interest, to the redemption date provided such redemption occurs within 90 days of such equity offering.

Fair Value of
Long-Term Debt  The Company estimates the fair value of its fixed rate senior and senior subordinated notes based on current quoted market prices. As of December 29, 2007, the carrying value and fair value of the senior and senior
subordinated notes was $525,000 and $480,448, respectively. The fair value of the variable rate senior secured term loan facility and senior secured revolving credit facility at December 29, 2007 and the fair value of the amended credit
facility at December 30, 2006 approximated their carrying values.



22



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12. DERIVATIVE FINANCIAL INSTRUMENTS

The Company follows SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended and related interpretations. SFAS 133 establishes accounting and reporting standards for derivative instruments.
Specifically, SFAS 133 requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and to measure those instruments at fair value. Additionally, the fair value adjustments will affect either
stockholders equity as accumulated other comprehensive income (loss) or net income (loss) depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity.

On February 14, 2007 the Company entered into an interest rate swap agreement to hedge a portion of the cash flows associated with the $650,000 senior secured
credit facility. The agreement has a total notional value of $415,000. The $415,000 notional value amortizes over the life of the swap. The interest rate swap agreement effectively converts approximately 60% of the outstanding amount under the
senior secured credit facility, which is floatingrate debt, to a fixedrate by having the Company pay fixedrate amounts in exchange for the receipt of the amount of the floatingrate interest payments.

Under the terms of this agreement, a quarterly net settlement is made for the difference between the fixed rate of 5.095% and the variable rate based upon the
threemonth LIBOR rate on the notional amount of the interest rate swap. The interest rate swap agreement terminates on February 14, 2010.

The
Company has determined that the interest rate swap agreement has been appropriately designated and documented as a cash flow hedge under SFAS 133. To record this swap as of December 29, 2007 the Company recorded the fair value of the derivative
liability of $9,413 in other current liabilities, offset by $5,730 and $3,683 in other comprehensive loss and deferred taxes, respectively. For the period February 6, 2007 to December 29, 2007 there was no hedge ineffectiveness recorded in
earnings.

13. PROVISION FOR INCOME TAXES

Income tax expense
consists of the following:



|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|-------------------------- |  | ------------------------------------------ | ------- | - |  |  | ------------------------------------------ | - | ---- | ------------------------------------- |  | ------------------------------------- | ------ |  | - | ------
|                           |  | Successor                                  |         |   |  |  | Predecessor                               
|                           |  | PeriodFebruary, 6 2007 toDecember 29, 2007 |         |   |  |  | PeriodDecember 31, 2006 toFebruary 5, 2007 |   |      | Fifty-TwoWeeks EndedDecember 30, 2006 |  | Fifty-TwoWeeks EndedDecember 31, 2005
|Federal:                   |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|Current                    |  | $                                          | 15,705  |   |  |  |                                            | $ | 3    |                                       |  | $                                     | 37,810 |  | $ | 37,699
|Deferred                   |  |                                            | (13,511 | ) |  |  |                                            |   | (343 | )                                     |  |                                       | 6,664  |  |   | 7,222 
|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|Total federal              |  |                                            | 2,194   |   |  |  |                                            |   | (340 | )                                     |  |                                       | 44,474 |  |   | 44,921
|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|State:                     |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|Current                    |  |                                            | 1,539   |   |  |  |                                            |   |     |                                       |  |                                       | 4,190  |  |   | 4,370 
|Deferred                   |  |                                            | (621    | ) |  |  |                                            |   |     |                                       |  |                                       | 885    |  |   | 642   
|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|Total state                |  |                                            | 918     |   |  |  |                                            |   |     |                                       |  |                                       | 5,075  |  |   | 5,012 
|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       
|Total income tax provision |  | $                                          | 3,112   |   |  |  |                                            | $ | (340 | )                                     |  | $                                     | 49,549 |  | $ | 49,933
|                           |  |                                            |         |   |  |  |                                            |   |      |                                       |  |                                       |        |  |   |       

In connection with the recapitalization of the Company in 1998, an election was made for federal and state income
tax purposes to value the assets and liabilities of the Company at fair value. As a result of such election, there is a difference between the financial reporting and tax bases of the Companys assets and liabilities. This difference was
accounted for by recording a deferred tax asset of approximately $175,700 with a corresponding credit to additional paid-in capital. The deferred tax asset is being realized as these differences, including tax goodwill, are deducted, principally
over a period of 15 years. In the opinion of management, the Company will have sufficient profits in the future to realize the deferred tax asset.

We have
significant deferred tax liabilities recorded on our financial statements, which are attributable to the effect of purchase accounting adjustments recorded as a result of the Merger.



23



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The tax effect of significant items comprising the Companys net deferred tax assets (liabilities) are as follows:



|                                                                       |  |                  |        |             |   |          |                  |  |         |  |             |       |  |   |         |  
|---------------------------------------------------------------------- |  | ---------------- | ------ | ----------- | - | -------- | ---------------- |  | ------- |  | ----------- | ----- |  | - | ------- | -
|                                                                       |  | Successor        |        |             |   |          | Predecessor      | 
|                                                                       |  | December 29,2007 |        |             |   |          | December 30,2006 | 
|                                                                       |  | Current          |        | Non-current |   |          |                  |  | Current |  | Non-current |      
|Deferred tax assets:                                                   |  |                  |        |             |   |          |                  |  |         |  |             |       |  |   |         |  
|Basis differential as a result of a basis step-up for tax              |  | $                |       |             | $ | 61,963   |                  |  |         |  | $           |      |  | $ | 74,068  |  
|Interest rate swap                                                     |  |                  | 3,683  |             |   |         |                  |  |         |  |             |      |  |   |        |  
|Domestic net operating lossPredecessor                                |  |                  | 8,734  |             |   |         |                  |  |         |  |             |      |  |   |        |  
|Foreign net operating loss carryforwards                               |  |                  | 320    |             |   |         |                  |  |         |  |             |      |  |   | 951     |  
|Deferred compensation arrangements, including stock-based compensation |  |                  | 160    |             |   |         |                  |  |         |  |             | 866   |  |   | 4,099   |  
|Employee benefits                                                      |  |                  | 2,523  |             |   |         |                  |  |         |  |             | 2,396 |  |   |        |  
|Other                                                                  |  |                  | 2,851  |             |   | 950      |                  |  |         |  |             | 2,610 |  |   | 3,439   |  
|Valuation allowance                                                    |  |                  |       |             |   |         |                  |  |         |  |             |      |  |   | (951    | )
|Deferred tax liabilities:                                              |  |                  |        |             |   |          |                  |  |         |  |             |       |  |   |         |  
|Fixed assets                                                           |  |                  |       |             |   | (20,114  | )                |  |         |  |             |      |  |   | (14,318 | )
|Intangible assets                                                      |  |                  |       |             |   | (148,364 | )                |  |         |  |             |      |  |   |        |  
|                                                                       |  |                  |        |             |   |          |                  |  |         |  |             |       |  |   |         |  
|                                                                       |  | $                | 18,271 |             | $ | (105,565 | )                |  |         |  | $           | 5,872 |  | $ | 67,288  |  
|                                                                       |  |                  |        |             |   |          |                  |  |         |  |             |       |  |   |         |  

The valuation allowance decreased $256 and $695 for the periods December 31, 2006 to February 5, 2007
and February 6, 2007 to December 29, 2007, respectively. For the fifty-two weeks ended December 30, 2006 and December 31, 2005 the valuation allowance decreased $74 and $1,873, respectively.

A reconciliation of the statutory federal income tax rate and the effective rate of the provision for income taxes consists of the following:



|                                                      |  |                                            |   |  |  |  |                                            |   |  |                                       |   |  |                                       |  
|----------------------------------------------------- |  | ------------------------------------------ | - |  |  |  | ------------------------------------------ | - |  | ------------------------------------- | - |  | ------------------------------------- | -
|                                                      |  | Successor                                  |   |  |  |  | Predecessor                                |  
|                                                      |  | PeriodFebruary 6, 2007 toDecember 29, 2007 |   |  |  |  | PeriodDecember 31, 2006 toFebruary 5, 2007 |   |  | Fifty-TwoWeeks EndedDecember 30, 2006 |   |  | Fifty-TwoWeeks EndedDecember 31, 2005 |  
|Statutory federal income tax rate                     |  | 35.0                                       | % |  |  |  | 35.0                                       | % |  | 35.0                                  | % |  | 35.0                                  | %
|State income taxes net of federal benefit             |  | 4.1                                        |   |  |  |  | 4.1                                        |   |  | 4.1                                   |   |  | 3.9                                   |  
|                                                      |  |                                            |   |  |  |  |                                            |   |  |                                       |   |  |                                       |  
|Combined federal and state statutory income tax rates |  | 39.1                                       |   |  |  |  | 39.1                                       |   |  | 39.1                                  |   |  | 38.9                                  |  
|Domestic production activities deduction              |  | (9.7                                       | ) |  |  |  |                                           |   |  | (0.7                                  | ) |  | (0.7                                  | )
|IRS audit settlement for prior years                  |  |                                           |   |  |  |  |                                           |   |  | (1.7                                  | ) |  |                                      |  
|Non-deductible stock compensation expense             |  | 3.4                                        |   |  |  |  |                                           |   |  |                                      |   |  |                                      |  
|Non-deductible compensation                           |  | 4.4                                        |   |  |  |  | (30.3                                      | ) |  |                                      |   |  |                                      |  
|Foreign loss utilization and tax rate differential    |  | (10.4                                      | ) |  |  |  | 10.6                                       |   |  | (0.2                                  | ) |  |                                      |  
|Non-deductible transaction costs                      |  | 8.6                                        |   |  |  |  | (2.9                                       | ) |  | 0.9                                   |   |  |                                      |  
|Other                                                 |  | 5.3                                        |   |  |  |  | (0.8                                       | ) |  | (0.4                                  | ) |  | 0.8                                   |  
|                                                      |  |                                            |   |  |  |  |                                            |   |  |                                       |   |  |                                       |  
|                                                      |  | 40.7                                       | % |  |  |  | 15.7                                       | % |  | 37.0                                  | % |  | 39.0                                  | %

In fiscal 2006, the Company recorded a benefit of $2,338 associated with the closure of an IRS audit for prior
years. The benefit was primarily due to favorable transfer pricing adjustments associated with sales to the Companys international subsidiary.

During the fourth quarter of 2005, the Company reached an agreement with the UK Inland Revenue regarding an inquiry through the 2004 taxable year. This agreement reduced available net operating loss carryforwards by approximately $6,391. At
December 30, 2006, the Company had foreign net operating loss carryforwards totaling approximately $3,417 with no expiration date. A valuation allowance of $950 had been established for these net operating losses, with $256 reversed in the
period December 31, 2006 to February 5, 2007 and the remainder reversed in the period February 6, 2007 to December 29, 2007.

The
Company files income tax returns in the U.S. federal jurisdiction, various states, and in the United Kingdom. The Companys earliest open U.S. federal tax year and United Kingdom tax year is 2005. In addition, open tax years related to states
remain subject to examination but are not considered material.

As a result of the implementation of FIN 48, the Company recognized a $224 increase in the
liability for unrecognized tax benefits, which was accounted for as a decrease to retained earnings (accumulated deficit). As of December 31, 2006, the Company had $1,389 of unrecognized tax benefits, of which the entire amount would reduce
income tax expense if recognized. The Company recognizes interest accrued and penalties, if any, related to unrecognized tax benefits in the



24



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provision for income taxes. As of December 31, 2006, interest accrued was approximately $130, net of income tax benefit. During the year ended
December 29, 2007, the Company recognized through the consolidated statement of operations an increase in accrued interest of $115 and no expense related to penalties.

As of December 29, 2007, the Company had tax reserves of $3,571 and accrued interest and penalties of $593. As of December 29, 2007, the amount of unrecognized tax benefits that, if recognized, would affect
the effective tax rate is $1,309.

A reconciliation of the beginning and ending amount of the tax reserves is as follows:



|                                        |  |   |      
|--------------------------------------- |  | - | -----
|Balance  December 31, 2006             |  | $ | 1,139
|Increase related to prior periods       |  |   |     
|                                        |  |   |      
|Balance  February 5, 2007              |  | $ | 1,139
|Increases related to prior periods      |  |   | 2,262
|Increases related to the current period |  |   | 170  
|                                        |  |   |      
|Balance  December 29, 2007             |  | $ | 3,571
|                                        |  |   |      

The Company expects its tax reserves will decrease by $2,262 in 2008.

14. PROFIT SHARING PLAN

The Company maintains a profit sharing plan (the
Plan) under section 401(k) of the Internal Revenue Code. Under the terms of the Plan the Company may make discretionary matching contributions in an amount, if any, to be determined annually based on a percentage of the employees
pretax contributions. Matching contributions, if made, are subject to a cap based on a percentage of the employees eligible earnings, as defined in the Plan. For the period December 31, 2006 to February 5, 2007 and February 6,
2007 to December 29, 2007 employer matching contributions were $103 and $1,117, respectively. Employer matching contributions amounted to $1,549 and $1,215 for fiscal 2006 and 2005, respectively. The Company, at its discretion, may also make
annual profit sharing contributions to the Plan. The Company did not incur any profit sharing contributions for the period December 31, 2006 to February 5, 2007 the period February 6, 2007 to December 29, 2007 or the fifty-two
weeks ended December 30, 2006 and December 31, 2005.

15. DEFERRED COMPENSATION

The Company has a deferred compensation agreement with certain key employees. Under this agreement, the Company at its election may match certain elective salary deferrals of eligible employees compensation up
to a maximum of $20 per employee per year. Employer contributions amounted to $188 and $200 and for fiscal 2006 and 2005, respectively. Benefits paid to retired or terminated employees during fiscal 2006 were $973. There were no benefits paid in
fiscal 2005.

In connection with the Transactions, which constituted a change in control event under the Companys Deferred Compensation Plan,
distributions totaling $2,129 were made to participants in February 2007. In February 2007, after the participant distributions, a new deferred compensation plan was established with the same key terms and conditions as the old plan. During the
period February 6, 2007 to December 29, 2007 employer contributions totaled $136 and benefits paid to retired or terminated employees were $84.

16. RESTRUCTURING CHARGE

During the fourth quarter of fiscal 2005, the Company initiated a restructuring plan designed to close 17 underperforming
stores and re-invest in talent and other strategic growth initiatives. In connection with this restructuring plan, a charge of $5,546 was recorded in the fourth quarter of fiscal 2005. Included in the restructuring charge was $2,404 related to lease
termination costs, $2,559 related to non-cash fixed assets write-offs and other costs, and $583 in employee related costs. All of the 17 underperforming stores have been closed and the Company anticipates no further accruals related to this
restructuring.

In accounting for the restructuring charges, the Company complied with SFAS No. 146, Accounting for Costs Associated with Exit
or Disposal Activities, which requires that a liability for costs associated with an exit or disposal activity be recognized and measured initially at fair value when the liability is incurred.



25



---

The following is a summary of restructuring charge activity:



|                                 |  |                                        |       |                                       |   |                               |  |   |       |  |   |      
|-------------------------------- |  | -------------------------------------- | ----- | ------------------------------------- | - | ----------------------------- |  | - | ----- |  | - | -----
|                                 |  | Fifty-Two Weeks Ended December 31,2005 |       | Accrued as ofDecember 31,2005        
|                                 |  | Expense                                |       | CostsPaid                             |   | Non-CashCharges               |  |  
|Occupancy                        |  | $                                      | 2,404 |                                       | $ | 1,254                         |  | $ |      |  | $ | 1,150
|Fixed asset impairment and other |  |                                        | 2,559 |                                       |   |                              |  |   | 2,475 |  |   | 84   
|Employee related                 |  |                                        | 583   |                                       |   | 110                           |  |   |      |  |   | 473  
|                                 |  |                                        |       |                                       |   |                               |  |   |       |  |   |      
|Total                            |  | $                                      | 5,546 |                                       | $ | 1,364                         |  | $ | 2,475 |  | $ | 1,707
|                                 |  |                                        |       |                                       |   |                               |  |   |       |  |   |      
|                                 |  |                                        |      
|                                 |  | Accrued as ofDecember 31,2005          |       | Fifty-Two WeeksEndedDecember 30, 2006 |   | Accrued as ofDecember 30,2006
|                                 |  |                                        |       | CostsPaid                             |   | Revisionsto Estimates         |  |  
|Occupancy                        |  | $                                      | 1,150 |                                       | $ | 992                           |  | $ | 158   |  | $ |     
|Other expenses                   |  |                                        | 84    |                                       |   | 60                            |  |   | 24    |  |   |     
|Employee related                 |  |                                        | 473   |                                       |   | 258                           |  |   | 215   |  |   |     
|                                 |  |                                        |       |                                       |   |                               |  |   |       |  |   |      
|Total                            |  | $                                      | 1,707 |                                       | $ | 1,310                         |  | $ | 397   |  | $ |     
|                                 |  |                                        |       |                                       |   |                               |  |   |       |  |   |      

There were no restructuring charges recognized during the periods December 31, 2006 to February 5, 2007
and February 6, 2007 to December 29, 2007.

17. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases most store locations, its corporate office building, a distribution facility and a number
of vehicles. The operating leases, which expire in various years through 2021, contain renewal options ranging from six months to five years and provide for base rentals plus contingent rentals thereafter, which are a function of sales volume. In
addition, the Company is required to pay real estate taxes, maintenance and other operating expenses applicable to the leased premises. Furthermore, several leases contain rent escalation clauses.

The aggregate annual future minimum lease commitments under operating leases as of December 29, 2007 are as follows:



|                             |  |                 |        
|---------------------------- |  | --------------- | -------
|                             |  | OperatingLeases
|2008                         |  | $               | 35,120 
|2009                         |  |                 | 33,235 
|2010                         |  |                 | 28,802 
|2011                         |  |                 | 25,539 
|2012                         |  |                 | 20,817 
|Thereafter                   |  |                 | 53,431 
|                             |  |                 |        
|Total minimum lease payments |  | $               | 196,944
|                             |  |                 |        

Rent expense, including contingent rentals, for the periods December 31, 2006 to February 5, 2007 and
February 6, 2007 to December 29, 2007 was $2,989 and $32,231, respectively. For the fifty-two weeks ended December 30, 2006 and December 31, 2005 rent expense, including contingent rentals was $28,892 and $26,694, respectively.
Included in rent expense were contingent rental payments of approximately $80, $607, $699 and $427 for the periods December 31, 2006 to February 5, 2007 and February 6, 2007 to December 29, 2007 and the fifty-two weeks ended
December 30, 2006 and December 31, 2005, respectively. Contingent rental payments are based primarily on sales at respective retail locations.

In addition, the Company recognized sublease income in the amount of $23 and $234 for the periods December 31, 2006 to February 5, 2007 and February 6, 2007 to December 29, 2007. For the fifty two weeks ended
December 30, 2006 and December 31, 2005 sublease rental income was $292 and $304, respectively.

Contingencies

A class action lawsuit was filed against us in February 2005 for alleged violations of certain California state wage and hour and employment laws with respect to certain
employees in our California retail stores. In December 2007 a preliminary settlement agreement was reached pursuant to mediation. The settlement is now pending court approval. Pursuant to the agreement we would pay a total of $950 (inclusive of
attorneys fees and administrative expenses) into a settlement fund. This amount has been recorded in our consolidated statement of operations during the fourth quarter of fiscal 2007.



26



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In addition, the Company is engaged in various lawsuits, either as plaintiff or defendant. In the opinion of management,
the ultimate outcome of these lawsuits will not have a material adverse effect on the Companys financial condition, results of operations or cash flows.

18. RELATED PARTY TRANSACTIONS

Upon closing of the Transactions, the Company entered into a management services contract with an affiliate of MDP
pursuant to which MDP will provide the Company with management and consulting services and financial and advisory services on an ongoing basis for a fee of $1,500 per year, payable in equal quarterly installments, and reimbursement of
outofpocket expenses incurred in connection with the provision of such services. The Company recorded $1,500 associated with the annual management fee for the period February 6, 2007 to December 29, 2007. Under this management
services agreement, the Company also agreed to provide customary indemnification. Pursuant to such agreement, at the closing of the Transactions, MDP received a fee of approximately $15,000 plus outofpocket expenses for services rendered
in connection with the Transactions.

19. SEGMENTS OF ENTERPRISE AND RELATED INFORMATION

The Company has segmented its operations in a manner that reflects how its chief operating decisionmaker (the CEO) currently reviews the results of the Company and its subsidiaries businesses.
The Company has two reportable segmentsretail and wholesale. The identification of these segments results from managements recognition that while the product sold is similar, the type of customer for the product and services and methods
used to distribute the product are different.

The CEO evaluates both its retail and wholesale operations based on an operating earnings
measure. Such measure gives recognition to specifically identifiable operating costs such as cost of sales and selling expenses. Administrative charges are generally not allocated to specific operating segments and are accordingly reflected in the
unallocated/corporate/other reconciliation to the total consolidated results. As described in Note 3, Acquisition of the Company, the Merger of the Company on February 6, 2007 resulted in several purchase accounting adjustments to
record assets and liabilities acquired at fair market value. The effects of purchase accounting adjustments on the operations of the Successor are not included in segment operations below, consistent with internal reports used by the CEO. These
amounts are also included in the unallocated/corporate/other column. Other components of the statements of operations, which are classified below operating income, are also not allocated by segments. The Company does not account for or report
assets, capital expenditures or depreciation and amortization by segment to the CEO.

In the second quarter of 2007, the Company elected to report its
fundraising division, Yankee Candle Fundraising (acquired from GBI Marketing in 2004), within the retail segment and as such, has recast historical information to be comparative with the current year presentation. This division had historically
been reported within the wholesale segment. This change was done to be consistent with the fact that the fundraising division is now managed by and reports to the Companys Senior Vice President of Retail.



27



---

The following are the relevant data for the period February 6, 2007 to December 29, 2007 (Successor), the
period December 31, 2006 to February 5, 2007 (Predecessor), fifty-two weeks ended December 30, 2006 (Predecessor) and fifty-two weeks ended December 31, 2005 (Predecessor):



|                                                         |  |        |         |           |   |                             |  |   |                                                |   |  |   |         |  
|-------------------------------------------------------- |  | ------ | ------- | --------- | - | --------------------------- |  | - | ---------------------------------------------- | - |  | - | ------- | -
|Successor Period February 6, 2007 to December 29, 2007   |  | Retail |         | Wholesale |   | Unallocated/Corporate/Other |  |   | Balance perConsolidatedStatements ofOperations |  
|Sales                                                    |  | $      | 381,168 |           | $ | 302,405                     |  | $ |                                               |   |  | $ | 683,573 |  
|Gross profit                                             |  |        | 251,128 |           |   | 142,336                     |  |   | (39,462                                        | ) |  |   | 354,002 |  
|Selling expenses                                         |  |        | 157,139 |           |   | 21,067                      |  |   | 14,192                                         |   |  |   | 192,398 |  
|Operating margin                                         |  |        | 93,989  |           |   | 121,269                     |  |   | (116,371                                       | ) |  |   | 98,887  |  
|Other expense, net                                       |  |        |        |           |   |                            |  |   | (91,248                                        | ) |  |   | (91,248 | )
|Income before provision for income taxes                 |  |        |        |           |   |                            |  |   |                                               |   |  |   | 7,639   |  
|                                                         |  |        |         |          
|Predecessor Period December 31, 2006 to February 5, 2007 |  | Retail |         | Wholesale |   | Unallocated/Corporate/Other |  |   | Balance perConsolidatedStatements ofOperations |  
|Sales                                                    |  | $      | 26,530  |           | $ | 26,852                      |  | $ |                                               |   |  | $ | 53,382  |  
|Gross profit                                             |  |        | 15,653  |           |   | 13,176                      |  |   |                                               |   |  |   | 28,829  |  
|Selling expenses                                         |  |        | 14,423  |           |   | 1,778                       |  |   |                                               |   |  |   | 16,201  |  
|Operating margin                                         |  |        | 1,230   |           |   | 11,398                      |  |   | (13,828                                        | ) |  |   | (1,200  | )
|Other expense, net                                       |  |        |        |           |   |                            |  |   | (970                                           | ) |  |   | (970    | )
|Loss before benefit from income taxes                    |  |        |        |           |   |                            |  |   |                                               |   |  |   | (2,170  | )
|                                                         |  |        |         |          
|Predecessor Fifty-Two Weeks Ended December 30, 2006      |  | Retail |         | Wholesale |   | Unallocated/Corporate/Other |  |   | Balance perConsolidatedStatements ofOperations |  
|Sales                                                    |  | $      | 388,820 |           | $ | 298,737                     |  | $ |                                               |   |  | $ | 687,557 |  
|Gross profit                                             |  |        | 254,616 |           |   | 135,603                     |  |   |                                               |   |  |   | 390,219 |  
|Selling expenses                                         |  |        | 149,155 |           |   | 19,039                      |  |   |                                               |   |  |   | 168,194 |  
|Operating margin                                         |  |        | 105,461 |           |   | 116,564                     |  |   | (72,738                                        | ) |  |   | 149,287 |  
|Other expense, net                                       |  |        |        |           |   |                            |  |   | (15,223                                        | ) |  |   | (15,223 | )
|Income before provision for income taxes                 |  |        |        |           |   |                            |  |   |                                               |   |  |   | 134,064 |  
|                                                         |  |        |         |          
|Predecessor Fifty-Two Weeks Ended December 31, 2005      |  | Retail |         | Wholesale |   | Unallocated/Corporate/Other |  |   | Balance perConsolidatedStatements ofOperations |  
|Sales                                                    |  | $      | 320,935 |           | $ | 280,246                     |  | $ |                                               |   |  | $ | 601,181 |  
|Gross profit                                             |  |        | 211,610 |           |   | 132,116                     |  |   |                                               |   |  |   | 343,726 |  
|Selling expenses                                         |  |        | 130,509 |           |   | 15,546                      |  |   |                                               |   |  |   | 146,055 |  
|Operating margin                                         |  |        | 81,101  |           |   | 116,570                     |  |   | (62,912                                        | ) |  |   | 134,759 |  
|Other expense, net                                       |  |        |        |           |   |                            |  |   | (6,725                                         | ) |  |   | (6,725  | )
|Income before provision for income taxes                 |  |        |        |           |   |                            |  |   |                                               |   |  |   | 128,034 |  

For the period February 6, 2007 to December 29, 2007, the period December 31, 2006 to
February 5, 2007 and for the fifty-two weeks ended December 30, 2006 and December 31, 2005 revenues from the Companys international operations were $40,608, $2,021, $28,549 and $23,013 respectively. Long lived assets of the
Companys international operations were approximately $1,128 and $1,012 as of December 29, 2007 and December 30, 2006, respectively. Goodwill at December 29, 2007 amounted to $1,019,982 with retail and wholesale allocated
$354,937 and $665,045 respectively.



28



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20. FINANCIAL INFORMATION RELATED TO GUARANTOR SUBSIDIARIES

As discussed in Note 11, obligations under the senior notes are guaranteed on an unsecured senior basis and obligations under the senior subordinated notes are guaranteed on an unsecured senior subordinated basis by
the Parent and 100% of the issuers existing and future domestic subsidiaries. The senior notes are fully and unconditionally guaranteed by all of our 100% owned U.S. subsidiaries (the Guarantor Subsidiaries) on a senior unsecured
basis. These guarantees are joint and several obligations of the Guarantors. The foreign subsidiary does not guarantee these notes.

The following tables
present condensed consolidating supplementary financial information for the issuer of the notes, the Parent, the issuers domestic guarantor subsidiaries and the non guarantor together with eliminations as of and for the periods indicated. The
issuers parent company is also a guarantor of the notes. Parent was a newly formed entity with no assets, liabilities or operations prior to the completion of the Merger on February 6, 2007. Separate complete financial statements of the
respective guarantors would not provide additional material information that would be useful in assessing the financial composition of the guarantors.

Condensed consolidating financial information is as follows:



29



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YANKEE HOLDING CORP. AND SUBSIDIARIES (SUCCESSOR)

CONDENSED CONSOLIDATING BALANCE SHEET

December 29, 2007

(in thousands)



|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|------------------------------------------- |  | ------ | ------- | --------------- | - | --------- | --------------------- |  | - | ---------------------- | - |  | ------------------------ | ------ | - | ------------ | - | -------- | - |  | - | ---------
|                                            |  | Parent |         | Issuer of Notes |   |           | GuarantorSubsidiaries |  |   | NonGuarantorSubsidiary |   |  | IntercompanyEliminations |        |   | Consolidated
|ASSETS                                      |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|CURRENT ASSETS:                             |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|Cash and cash equivalents                   |  | $      |        |                 | $ | 1,316     |                       |  | $ | 2,341                  |   |  | $                        | 1,970  |   |              | $ |         |   |  | $ | 5,627    
|Accounts receivable, net                    |  |        |        |                 |   | 40,655    |                       |  |   | 1,251                  |   |  |                          | 10,220 |   |              |   |         |   |  |   | 52,126   
|Inventory                                   |  |        |        |                 |   | 60,580    |                       |  |   | 1,470                  |   |  |                          | 9,494  |   |              |   | (1,581   | ) |  |   | 69,963   
|Prepaid expenses and other current assets   |  |        |        |                 |   | 8,491     |                       |  |   | 66                     |   |  |                          | 787    |   |              |   |         |   |  |   | 9,344    
|Deferred tax assets                         |  |        |        |                 |   | 17,841    |                       |  |   | 430                    |   |  |                          |       |   |              |   |         |   |  |   | 18,271   
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|TOTAL CURRENT ASSETS                        |  |        |        |                 |   | 128,883   |                       |  |   | 5,558                  |   |  |                          | 22,471 |   |              |   | (1,581   | ) |  |   | 155,331  
|                                            |  |        |         |                 |   |          
|PROPERTY AND EQUIPMENT, NET                 |  |        |        |                 |   | 153,954   |                       |  |   | 829                    |   |  |                          | 1,128  |   |              |   |         |   |  |   | 155,911  
|MARKETABLE SECURITIES                       |  |        |        |                 |   | 259       |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 259      
|GOODWILL                                    |  |        |        |                 |   | 1,010,862 |                       |  |   | 9,120                  |   |  |                          |       |   |              |   |         |   |  |   | 1,019,982
|INTANGIBLE ASSETS                           |  |        |        |                 |   | 411,431   |                       |  |   | 2,811                  |   |  |                          |       |   |              |   |         |   |  |   | 414,242  
|DEFERRED FINANCING COSTS                    |  |        |        |                 |   | 28,654    |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 28,654   
|OTHER ASSETS                                |  |        |        |                 |   | 1,340     |                       |  |   |                       |   |  |                          | 78     |   |              |   |         |   |  |   | 1,418    
|INVESTMENT IN SUBSIDIARIES                  |  |        | 422,598 |                 |   | 6,370     |                       |  |   |                       |   |  |                          |       |   |              |   | (428,968 | ) |  |   |         
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|TOTAL ASSETS                                |  | $      | 422,598 |                 | $ | 1,741,753 |                       |  | $ | 18,318                 |   |  | $                        | 23,677 |   |              | $ | (430,549 | ) |  | $ | 1,775,797
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|LIABILITIES AND STOCKHOLDERS EQUITY        |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|CURRENT LIABILITIES:                        |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|Accounts payable                            |  | $      |        |                 | $ | 20,350    |                       |  | $ | 355                    |   |  | $                        | 908    |   |              | $ |         |   |  | $ | 21,613   
|Accrued payroll                             |  |        |        |                 |   | 17,016    |                       |  |   | 92                     |   |  |                          | 286    |   |              |   |         |   |  |   | 17,394   
|Accrued interest                            |  |        |        |                 |   | 17,679    |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 17,679   
|Accrued income taxes                        |  |        |        |                 |   | 15,755    |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 15,755   
|Accrued purchases of property and equipment |  |        |        |                 |   | 2,818     |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 2,818    
|Accrued sales tax                           |  |        |        |                 |   | 4,822     |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 4,822    
|Other accrued liabilities                   |  |        |        |                 |   | 26,813    |                       |  |   | 2,934                  |   |  |                          | 1,340  |   |              |   |         |   |  |   | 31,087   
|Current portion of long-term debt           |  |        |        |                 |   | 6,500     |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 6,500    
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|TOTAL CURRENT LIABILITIES                   |  |        |        |                 |   | 111,753   |                       |  |   | 3,381                  |   |  |                          | 2,534  |   |              |   |         |   |  |   | 117,668  
|                                            |  |        |         |                 |   |          
|DEFERRED COMPENSATION OBLIGATION            |  |        |        |                 |   | 410       |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 410      
|DEFERRED TAX LIABILITIES                    |  |        |        |                 |   | 105,565   |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 105,565  
|LONG-TERM DEBT                              |  |        |        |                 |   | 1,123,625 |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 1,123,625
|DEFERRED RENT                               |  |        |        |                 |   | 10,220    |                       |  |   | 10                     |   |  |                          |       |   |              |   |         |   |  |   | 10,230   
|OTHER LONG-TERM LIABILITIES                 |  |        |        |                 |   | 1,694     |                       |  |   |                       |   |  |                          |       |   |              |   |         |   |  |   | 1,694    
|INTERCOMPANY                                |  |        |        |                 |   | (28,735   | )                     |  |   | 15,904                 |   |  |                          | 22,753 |   |              |   | (9,922   | ) |  |   |         
|STOCKHOLDERS EQUITY                        |  |        | 422,598 |                 |   | 417,221   |                       |  |   | (977                   | ) |  |                          | (1,610 | ) |              |   | (420,627 | ) |  |   | 416,605  
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  |  | $      | 422,598 |                 | $ | 1,741,753 |                       |  | $ | 18,318                 |   |  | $                        | 23,677 |   |              | $ | (430,549 | ) |  | $ | 1,775,797
|                                            |  |        |         |                 |   |           |                       |  |   |                        |   |  |                          |        |   |              |   |          |   |  |   |          



30



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YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING BALANCE SHEET

December 30, 2006

(in thousands)



|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ----- | ---------------------- |  | - | ------------------------ | - |  | ------------ | ------- | - |  | - | -------
|                                            |  | Issuer ofNotes |         |   | GuarantorSubsidiaries |   |       | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated
|ASSETS                                      |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|CURRENT ASSETS:                             |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|Cash and cash equivalents                   |  | $              | 16,667  |   |                       | $ | 2,362 |                        |  | $ | 3,744                    |   |  | $            |        |   |  | $ | 22,773 
|Accounts receivable, net                    |  |                | 26,440  |   |                       |   | 742   |                        |  |   | 6,587                    |   |  |              |        |   |  |   | 33,769 
|Inventory                                   |  |                | 52,633  |   |                       |   | 1,475 |                        |  |   | 8,527                    |   |  |              | (1,505  | ) |  |   | 61,130 
|Prepaid expenses and other current assets   |  |                | 8,040   |   |                       |   | 87    |                        |  |   | 524                      |   |  |              |        |   |  |   | 8,651  
|Deferred tax assets                         |  |                | 5,549   |   |                       |   | 323   |                        |  |   |                         |   |  |              |        |   |  |   | 5,872  
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|TOTAL CURRENT ASSETS                        |  |                | 109,329 |   |                       |   | 4,989 |                        |  |   | 19,382                   |   |  |              | (1,505  | ) |  |   | 132,195
|                                            |  |                |         |   |                      
|PROPERTY AND EQUIPMENT, NET                 |  |                | 138,653 |   |                       |   | 938   |                        |  |   | 1,012                    |   |  |              |        |   |  |   | 140,603
|MARKETABLE SECURITIES                       |  |                | 2,021   |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 2,021  
|DEFERRED TAX ASSETS                         |  |                | 67,288  |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 67,288 
|GOODWILL                                    |  |                | 11,756  |   |                       |   | 2,096 |                        |  |   |                         |   |  |              |        |   |  |   | 13,852 
|INTANGIBLE ASSETS                           |  |                | 14,445  |   |                       |   | 1,179 |                        |  |   |                         |   |  |              |        |   |  |   | 15,624 
|DEFERRED FINANCING COSTS                    |  |                | 596     |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 596    
|OTHER ASSETS                                |  |                | 652     |   |                       |   |      |                        |  |   | 91                       |   |  |              |        |   |  |   | 743    
|INVESTMENT IN SUBSIDIARIES                  |  |                | 8,716   |   |                       |   |      |                        |  |   |                         |   |  |              | (8,716  | ) |  |   |       
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|TOTAL ASSETS                                |  | $              | 353,456 |   |                       | $ | 9,202 |                        |  | $ | 20,485                   |   |  | $            | (10,221 | ) |  | $ | 372,922
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|LIABILITIES AND STOCKHOLDERS EQUITY        |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|CURRENT LIABILITIES:                        |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|Accounts payable                            |  | $              | 24,166  |   |                       | $ | 414   |                        |  | $ | 1,472                    |   |  | $            |        |   |  | $ | 26,052 
|Accrued payroll                             |  |                | 19,253  |   |                       |   | 268   |                        |  |   | 281                      |   |  |              |        |   |  |   | 19,802 
|Accrued interest                            |  |                | 428     |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 428    
|Accrued income taxes                        |  |                | 27,286  |   |                       |   | (371  | )                      |  |   | (17                      | ) |  |              | (298    | ) |  |   | 26,600 
|Accrued purchases of property and equipment |  |                | 3,515   |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 3,515  
|Accrued sales tax                           |  |                | 5,168   |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 5,168  
|Other accrued liabilities                   |  |                | 12,788  |   |                       |   | 2,449 |                        |  |   | 1,098                    |   |  |              |        |   |  |   | 16,335 
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|TOTAL CURRENT LIABILITIES                   |  |                | 92,604  |   |                       |   | 2,760 |                        |  |   | 2,834                    |   |  |              | (298    | ) |  |   | 97,900 
|                                            |  |                |         |   |                      
|DEFERRED COMPENSATION OBLIGATION            |  |                | 2,213   |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 2,213  
|LONG-TERM DEBT                              |  |                | 140,000 |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 140,000
|DEFERRED RENT                               |  |                | 17,244  |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 17,244 
|INTERCOMPANY                                |  |                | (14,170 | ) |                       |   | 2,718 |                        |  |   | 11,305                   |   |  |              | 147     |   |  |   |       
|STOCKHOLDERS EQUITY                        |  |                | 115,565 |   |                       |   | 3,724 |                        |  |   | 6,346                    |   |  |              | (10,070 | ) |  |   | 115,565
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  |  | $              | 353,456 |   |                       | $ | 9,202 |                        |  | $ | 20,485                   |   |  | $            | (10,221 | ) |  | $ | 372,922
|                                            |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |        



31



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (SUCCESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Period February 6, 2007
to December 29, 2007

(in thousands)



|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|-------------------------------------------------------------- |  | ------ | ------ | - | -------------- | - | --------------------- |  | - | ---------------------- | - |  | ------------------------ | ------ | - | ------------ | - | ------- | - |  | - | ------- | -
|                                                               |  | Parent |        |   | Issuer ofNotes |   | GuarantorSubsidiaries |  |   | NonGuarantorSubsidiary |   |  | IntercompanyEliminations |        |   | Consolidated |  
|Sales                                                          |  | $      |       |   |                | $ | 653,950               |  | $ | 7,740                  |   |  | $                        | 37,382 |   |              | $ | (15,499 | ) |  | $ | 683,573 |  
|Cost of sales                                                  |  |        |       |   |                |   | 306,323               |  |   | 5,474                  |   |  |                          | 33,631 |   |              |   | (15,857 | ) |  |   | 329,571 |  
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|Gross profit                                                   |  |        |       |   |                |   | 347,627               |  |   | 2,266                  |   |  |                          | 3,751  |   |              |   | 358     |   |  |   | 354,002 |  
|                                                               |  |        |        |   |                |  
|Selling expenses                                               |  |        |       |   |                |   | 179,815               |  |   | 3,878                  |   |  |                          | 8,705  |   |              |   |        |   |  |   | 192,398 |  
|General and administrative expenses                            |  |        |       |   |                |   | 62,717                |  |   |                       |   |  |                          |       |   |              |   |        |   |  |   | 62,717  |  
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|                                                               |  |        |        |   |                |  
|Income (loss) from operations                                  |  |        |       |   |                |   | 105,095               |  |   | (1,612                 | ) |  |                          | (4,954 | ) |              |   | 358     |   |  |   | 98,887  |  
|                                                               |  |        |        |   |                |  
|Interest income                                                |  |        |       |   |                |   |                      |  |   |                       |   |  |                          | (43    | ) |              |   |        |   |  |   | (43     | )
|Interest expense                                               |  |        |       |   |                |   | 92,443                |  |   |                       |   |  |                          |       |   |              |   |        |   |  |   | 92,443  |  
|Other expense (income)                                         |  |        |       |   |                |   | 2,766                 |  |   |                       |   |  |                          | (3,918 | ) |              |   |        |   |  |   | (1,152  | )
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|(Loss) income before (benefit from) provision for income taxes |  |        |       |   |                |   | 9,886                 |  |   | (1,612                 | ) |  |                          | (993   | ) |              |   | 358     |   |  |   | 7,639   |  
|                                                               |  |        |        |   |                |  
|(Benefit from) provision for income taxes                      |  |        |       |   |                |   | 3,899                 |  |   | (635                   | ) |  |                          | (297   | ) |              |   | 145     |   |  |   | 3,112   |  
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|(Loss) income before equity earnings in subsidiaries           |  |        |       |   |                |   | 5,987                 |  |   | (977                   | ) |  |                          | (696   | ) |              |   | 213     |   |  |   | 4,527   |  
|                                                               |  |        |        |   |                |  
|Equity losses of subsidiaries, net of tax                      |  |        | (4,527 | ) |                |   | 1,673                 |  |   |                       |   |  |                          |       |   |              |   | 2,854   |   |  |   |        |  
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  
|Net (loss) income                                              |  | $      | 4,527  |   |                | $ | 4,314                 |  | $ | (977                   | ) |  | $                        | (696   | ) |              | $ | (2,641  | ) |  | $ | 4,527   |  
|                                                               |  |        |        |   |                |   |                       |  |   |                        |   |  |                          |        |   |              |   |         |   |  |   |         |  

YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Period December 31, 2006 to February 5, 2007

(in thousands)



|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|------------------------------------------- |  | -------------- | ------ | - | --------------------- | - | ---- | ---------------------- |  | - | ------------------------ | - |  | ------------ | ------ | - |  | - | ------ | -
|                                            |  | Issuer ofNotes |        |   | GuarantorSubsidiaries |   |      | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |       
|Sales                                       |  | $              | 52,861 |   |                       | $ | 555  |                        |  | $ | 1,747                    |   |  | $            | (1,781 | ) |  | $ | 53,382 |  
|Cost of sales                               |  |                | 23,935 |   |                       |   | 385  |                        |  |   | 1,473                    |   |  |              | (1,240 | ) |  |   | 24,553 |  
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|Gross profit                                |  |                | 28,926 |   |                       |   | 170  |                        |  |   | 274                      |   |  |              | (541   | ) |  |   | 28,829 |  
|                                            |  |                |        |   |                      
|Selling expenses                            |  |                | 15,312 |   |                       |   | 338  |                        |  |   | 551                      |   |  |              |       |   |  |   | 16,201 |  
|General and administrative expenses         |  |                | 13,828 |   |                       |   |     |                        |  |   |                         |   |  |              |       |   |  |   | 13,828 |  
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|Loss from operations                        |  |                | (214   | ) |                       |   | (168 | )                      |  |   | (277                     | ) |  |              | (541   | ) |  |   | (1,200 | )
|                                            |  |                |        |   |                      
|Interest income                             |  |                |       |   |                       |   |     |                        |  |   | (1                       | ) |  |              |       |   |  |   | (1     | )
|Interest expense                            |  |                | 986    |   |                       |   |     |                        |  |   |                         |   |  |              |       |   |  |   | 986    |  
|Other (income) expense                      |  |                | (39    | ) |                       |   |     |                        |  |   | 24                       |   |  |              |       |   |  |   | (15    | )
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|Loss before benefit from income taxes       |  |                | (1,161 | ) |                       |   | (168 | )                      |  |   | (300                     | ) |  |              | (541   | ) |  |   | (2,170 | )
|                                            |  |                |        |   |                      
|Benefit from income taxes                   |  |                | (144   | ) |                       |   | (21  | )                      |  |   | (90                      | ) |  |              | (85    | ) |  |   | (340   | )
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|Loss before equity earnings in subsidiaries |  |                | (1,017 | ) |                       |   | (147 | )                      |  |   | (210                     | ) |  |              | (456   | ) |  |   | (1,830 | )
|                                            |  |                |        |   |                      
|Equity losses of subsidiaries, net of tax   |  |                | 357    |   |                       |   |     |                        |  |   |                         |   |  |              | (357   | ) |  |   |       |  
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  
|Net loss                                    |  | $              | (1,374 | ) |                       | $ | (147 | )                      |  | $ | (210                     | ) |  | $            | (99    | ) |  | $ | (1,830 | )
|                                            |  |                |        |   |                       |   |      |                        |  |   |                          |   |  |              |        |   |  |   |        |  



32



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Fifty-Two Weeks Ended December 30, 2006

(in thousands)



|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|----------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ----- | ---------------------- |  | - | ------------------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                |  | Issuer ofNotes |         |   | GuarantorSubsidiaries |   |       | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |        
|Sales                                           |  | $              | 666,390 |   |                       | $ | 7,123 |                        |  | $ | 25,840                   |   |  | $            | (11,796 | ) |  | $ | 687,557 |  
|Cost of sales                                   |  |                | 284,487 |   |                       |   | 3,893 |                        |  |   | 20,673                   |   |  |              | (11,715 | ) |  |   | 297,338 |  
|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Gross profit                                    |  |                | 381,903 |   |                       |   | 3,230 |                        |  |   | 5,167                    |   |  |              | (81     | ) |  |   | 390,219 |  
|                                                |  |                |         |   |                      
|Selling expenses                                |  |                | 157,635 |   |                       |   | 4,200 |                        |  |   | 6,359                    |   |  |              |        |   |  |   | 168,194 |  
|General and administrative expenses             |  |                | 73,135  |   |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | 73,135  |  
|Restructure credit                              |  |                | (397    | ) |                       |   |      |                        |  |   |                         |   |  |              |        |   |  |   | (397    | )
|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                   |  |                | 151,530 |   |                       |   | (970  | )                      |  |   | (1,192                   | ) |  |              | (81     | ) |  |   | 149,287 |  
|                                                |  |                |         |   |                      
|Interest income                                 |  |                |        |   |                       |   |      |                        |  |   | (30                      | ) |  |              |        |   |  |   | (30     | )
|Interest expense                                |  |                | 15,355  |   |                       |   |      |                        |  |   | 3                        |   |  |              |        |   |  |   | 15,358  |  
|Other (income) expense                          |  |                | 1,878   |   |                       |   |      |                        |  |   | (1,983                   | ) |  |              |        |   |  |   | (105    | )
|Equity in earnings of subsidiaries              |  |                | (209    | ) |                       |   |      |                        |  |   |                         |   |  |              | 209     |   |  |   |        |  
|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Income (loss) before provision for income taxes |  |                | 134,506 |   |                       |   | (970  | )                      |  |   | 818                      |   |  |              | (290    | ) |  |   | 134,064 |  
|Provision (benefit) for income taxes            |  |                | 50,017  |   |                       |   | (361  | )                      |  |   |                         |   |  |              | (107    | ) |  |   | 49,549  |  
|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Net income (loss)                               |  | $              | 84,489  |   |                       | $ | (609  | )                      |  | $ | 818                      |   |  | $            | (183    | ) |  | $ | 84,515  |  
|                                                |  |                |         |   |                       |   |       |                        |  |   |                          |   |  |              |         |   |  |   |         |  

YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Fifty-Two Weeks Ended December 31, 2005

(in thousands)



|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|----------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ---------------------- |  | - | ------------------------ | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                |  | Issuer ofNotes |         |   | GuarantorSubsidiaries |   | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |        
|Sales                                           |  | $              | 587,339 |   |                       | $ | 4,732                  |  | $ | 19,987                   |   |  | $            | (10,877 | ) |  | $ | 601,181 |  
|Cost of sales                                   |  |                | 251,488 |   |                       |   | 1,238                  |  |   | 14,943                   |   |  |              | (10,214 | ) |  |   | 257,455 |  
|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Gross profit                                    |  |                | 335,851 |   |                       |   | 3,494                  |  |   | 5,044                    |   |  |              | (663    | ) |  |   | 343,726 |  
|                                                |  |                |         |   |                      
|Selling expenses                                |  |                | 138,213 |   |                       |   | 2,410                  |  |   | 5,432                    |   |  |              |        |   |  |   | 146,055 |  
|General and administrative expenses             |  |                | 57,366  |   |                       |   |                       |  |   |                         |   |  |              |        |   |  |   | 57,366  |  
|Restructure charge                              |  |                | 5,546   |   |                       |   |                       |  |   |                         |   |  |              |        |   |  |   | 5,546   |  
|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Income (loss) from operations                   |  |                | 134,726 |   |                       |   | 1,084                  |  |   | (388                     | ) |  |              | (663    | ) |  |   | 134,759 |  
|                                                |  |                |         |   |                      
|Interest income                                 |  |                | (1      | ) |                       |   |                       |  |   | (22                      | ) |  |              |        |   |  |   | (23     | )
|Interest expense                                |  |                | 7,251   |   |                       |   |                       |  |   | (1                       | ) |  |              |        |   |  |   | 7,250   |  
|Other (income) expense                          |  |                | (286    | ) |                       |   |                       |  |   | (216                     | ) |  |              |        |   |  |   | (502    | )
|Equity in earnings of subsidiaries              |  |                | (513    | ) |                       |   |                       |  |   |                         |   |  |              | 513     |   |  |   |        |  
|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Income (loss) before provision for income taxes |  |                | 128,275 |   |                       |   | 1,084                  |  |   | (149                     | ) |  |              | (1,176  | ) |  |   | 128,034 |  
|Provision (benefit) for income taxes            |  |                | 49,970  |   |                       |   | 422                    |  |   |                         |   |  |              | (459    | ) |  |   | 49,933  |  
|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  
|Net income (loss)                               |  | $              | 78,305  |   |                       | $ | 662                    |  | $ | (149                     | ) |  | $            | (717    | ) |  | $ | 78,101  |  
|                                                |  |                |         |   |                       |   |                        |  |   |                          |   |  |              |         |   |  |   |         |  



33



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (SUCCESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Period February 6, 2007
to December 29, 2007

(in thousands)



|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|------------------------------------------------------------------------------------------- |  | ------ | -------- | - | -------------- | - | ---------- | --------------------- |  | - | ---------------------- | - |  | ------------------------ | ------ | - | ------------ | - | ------ | - |  | - | ---------- | -
|                                                                                            |  | Parent |          |   | Issuer ofNotes |   |            | GuarantorSubsidiaries |  |   | NonGuarantorSubsidiary |   |  | IntercompanyEliminations |        |   | Consolidated |  
|CASH FLOWS (USED IN ) PROVIDED BY OPERATING ACTIVITIES:                                     |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|Net income (loss)                                                                           |  | $      | 4,527    |   |                | $ | 4,314      |                       |  | $ | (977                   | ) |  | $                        | (696   | ) |              | $ | (2,641 | ) |  | $ | 4,527      |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|Depreciation and amortization                                                               |  |        |         |   |                |   | 41,514     |                       |  |   | 237                    |   |  |                          | 237    |   |              |   |       |   |  |   | 41,988     |  
|Unrealized loss on marketable securities                                                    |  |        |         |   |                |   | 238        |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 238        |  
|Stock based compensation expense                                                            |  |        |         |   |                |   | 670        |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 670        |  
|Deferred taxes                                                                              |  |        |         |   |                |   | (14,025    | )                     |  |   | (107                   | ) |  |                          |       |   |              |   |       |   |  |   | (14,132    | )
|Non-cash charge related to increased inventory carrying value                               |  |        |         |   |                |   | 40,472     |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 40,472     |  
|Loss on disposal and impairment of property and equipment                                   |  |        |         |   |                |   | 640        |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 640        |  
|Investments in marketable securities                                                        |  |        |         |   |                |   | (581       | )                     |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | (581       | )
|Equity in earnings of subsidiaries                                                          |  |        | (4,527   | ) |                |   | 1,673      |                       |  |   |                       |   |  |                          |       |   |              |   | 2,854  |   |  |   |           |  
|Changes in assets and liabilities                                                           |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|Accounts receivable, net                                                                    |  |        |         |   |                |   | (13,024    | )                     |  |   | (668                   | ) |  |                          | (4,697 | ) |              |   |       |   |  |   | (18,389    | )
|Inventory                                                                                   |  |        |         |   |                |   | (2,572     | )                     |  |   | (147                   | ) |  |                          | 219    |   |              |   | (458   | ) |  |   | (2,958     | )
|Prepaid expenses and other assets                                                           |  |        |         |   |                |   | (3,635     | )                     |  |   | 2,086                  |   |  |                          | 121    |   |              |   |       |   |  |   | (1,428     | )
|Accounts payable                                                                            |  |        |         |   |                |   | 2,396      |                       |  |   | 133                    |   |  |                          | (223   | ) |              |   |       |   |  |   | 2,306      |  
|Income Taxes Payable                                                                        |  |        |         |   |                |   | (10,142    | )                     |  |   | 371                    |   |  |                          | 17     |   |              |   | 298    |   |  |   | (9,456     | )
|Accrued expenses and other liabilities                                                      |  |        |         |   |                |   | 29,144     |                       |  |   | 869                    |   |  |                          | (686   | ) |              |   |       |   |  |   | 29,327     |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                         |  |        |         |   |                |   | 77,082     |                       |  |   | 1,797                  |   |  |                          | (5,708 | ) |              |   | 53     |   |  |   | 73,224     |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|CASH FLOWS USED IN INVESTING ACTIVITIES:                                                    |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|Purchase of property and equipment                                                          |  |        |         |   |                |   | (28,249    | )                     |  |   | (69                    | ) |  |                          | (166   | ) |              |   |       |   |  |   | (28,484    | )
|Acquisition of the Company                                                                  |  |        |         |   |                |   | (1,429,476 | )                     |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | (1,429,476 | )
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|NET CASH USED IN INVESTING ACTIVITIES                                                       |  |        |         |   |                |   | (1,457,725 | )                     |  |   | (69                    | ) |  |                          | (166   | ) |              |   |       |   |  |   | (1,457,960 | )
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:                                      |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|Repayment of borrowings                                                                     |  |        |         |   |                |   | (295,875   | )                     |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | (295,875   | )
|Net proceeds from issuance of common stock                                                  |  |        | 418,083  |   |                |   |           |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 418,083    |  
|Borrowings under senior secured term loan facility                                          |  |        |         |   |                |   | 650,000    |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 650,000    |  
|Deferred financing costs                                                                    |  |        |         |   |                |   | (32,374    | )                     |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | (32,374    | )
|Borrowings under senior secured revolving credit facility                                   |  |        |         |   |                |   | 111,000    |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 111,000    |  
|Borrowings under senior notes and senior subordinated notes                                 |  |        |         |   |                |   | 525,000    |                       |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | 525,000    |  
|Repurchase of common stock                                                                  |  |        |         |   |                |   | (294       | )                     |  |   |                       |   |  |                          |       |   |              |   |       |   |  |   | (294       | )
|Intercompanies                                                                              |  |        | (418,083 | ) |                |   | 413,721    |                       |  |   | (1,543                 | ) |  |                          | 5,958  |   |              |   | (53    | ) |  |   |           |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                         |  |        |         |   |                |   | 1,371,178  |                       |  |   | (1,543                 | ) |  |                          | 5,958  |   |              |   | (53    | ) |  |   | 1,375,540  |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|EFFECT EXCHANGE RATE CHANGES ON CASH                                                        |  |        |         |   |                |   |           |                       |  |   |                       |   |  |                          | 39     |   |              |   |       |   |  |   | 39         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                        |  |        |         |   |                |   | (9,465     | )                     |  |   | 185                    |   |  |                          | 123    |   |              |   |       |   |  |   | (9,157     | )
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                              |  |        |         |   |                |   | 10,781     |                       |  |   | 2,156                  |   |  |                          | 1,847  |   |              |   |       |   |  |   | 14,784     |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                    |  | $      |         |   |                | $ | 1,316      |                       |  | $ | 2,341                  |   |  | $                        | 1,970  |   |              | $ |       |   |  | $ | 5,627      |  
|                                                                                            |  |        |          |   |                |   |            |                       |  |   |                        |   |  |                          |        |   |              |   |        |   |  |   |            |  



34



---

YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Period December 31, 2006 to February 5, 2007

(in thousands)



|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|------------------------------------------------------------------------------------------- |  | -------------- | ------ | - | --------------------- | - | ----- | ---------------------- |  | - | ------------------------ | - |  | ------------ | ---- | - |  | - | ------- | -
|                                                                                            |  | Issuer ofNotes |        |   | GuarantorSubsidiaries |   |       | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |     
|CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES:                                      |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Net loss                                                                                    |  | $              | (1,374 | ) |                       | $ | (147  | )                      |  | $ | (210                     | ) |  | $            | (99  | ) |  | $ | (1,830  | )
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Depreciation and amortization                                                               |  |                | 2,608  |   |                       |   | 46    |                        |  |   | 19                       |   |  |              |     |   |  |   | 2,673   |  
|Unrealized gain on marketable securities                                                    |  |                | (31    | ) |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | (31     | )
|Stock based compensation expense                                                            |  |                | 8,638  |   |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | 8,638   |  
|Deferred taxes                                                                              |  |                | (3,905 | ) |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | (3,905  | )
|Loss on disposal and impairment of property and equipment                                   |  |                | 14     |   |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | 14      |  
|Investments in marketable securities                                                        |  |                | (27    | ) |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | (27     | )
|Excess tax benefit from exercise of stock options                                           |  |                | (4,317 | ) |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | (4,317  | )
|Equity in earnings of subsidiaries                                                          |  |                | 357    |   |                       |   |      |                        |  |   |                         |   |  |              | (357 | ) |  |   |        |  
|Changes in assets and liabilities                                                           |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Accounts receivable, net                                                                    |  |                | (1,190 | ) |                       |   | 159   |                        |  |   | 1,210                    |   |  |              |     |   |  |   | 179     |  
|Inventory                                                                                   |  |                | (2,396 | ) |                       |   | 152   |                        |  |   | (1,029                   | ) |  |              | 534  |   |  |   | (2,739  | )
|Prepaid expenses and other assets                                                           |  |                | 697    |   |                       |   | 1     |                        |  |   | (362                     | ) |  |              |     |   |  |   | 336     |  
|Accounts payable                                                                            |  |                | (3,895 | ) |                       |   | (191  | )                      |  |   | (357                     | ) |  |              |     |   |  |   | (4,443  | )
|Income taxes payable                                                                        |  |                | 3,642  |   |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | 3,642   |  
|Accrued expenses and other liabilities                                                      |  |                | (7,437 | ) |                       |   | (550  | )                      |  |   | (270                     | ) |  |              |     |   |  |   | (8,257  | )
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                         |  |                | (8,616 | ) |                       |   | (530  | )                      |  |   | (999                     | ) |  |              | 78   |   |  |   | (10,067 | )
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH FLOWS USED IN INVESTING ACTIVITIES:                                                    |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Purchase of property and equipment                                                          |  |                | (2,247 | ) |                       |   |      |                        |  |   | (3                       | ) |  |              |     |   |  |   | (2,250  | )
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH USED IN INVESTING ACTIVITIES                                                       |  |                | (2,247 | ) |                       |   |      |                        |  |   | (3                       | ) |  |              |     |   |  |   | (2,250  | )
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:                                      |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Excess tax benefit from exercise of stock options                                           |  |                | 4,317  |   |                       |   |      |                        |  |   |                         |   |  |              |     |   |  |   | 4,317   |  
|Intercompany                                                                                |  |                | 660    |   |                       |   | 324   |                        |  |   | (906                     | ) |  |              | (78  | ) |  |   |        |  
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                         |  |                | 4,977  |   |                       |   | 324   |                        |  |   | (906                     | ) |  |              | (78  | ) |  |   | 4,317   |  
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|EFFECT EXCHANGE RATE CHANGES ON CASH                                                        |  |                |       |   |                       |   |      |                        |  |   | 11                       |   |  |              |     |   |  |   | 11      |  
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                                   |  |                | (5,886 | ) |                       |   | (206  | )                      |  |   | (1,897                   | ) |  |              |     |   |  |   | (7,989  | )
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                              |  |                | 16,667 |   |                       |   | 2,362 |                        |  |   | 3,744                    |   |  |              |     |   |  |   | 22,773  |  
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                    |  | $              | 10,781 |   |                       | $ | 2,156 |                        |  | $ | 1,847                    |   |  | $            |     |   |  | $ | 14,784  |  
|                                                                                            |  |                |        |   |                       |   |       |                        |  |   |                          |   |  |              |      |   |  |   |         |  



35



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YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Fifty-two Weeks Ended December 30, 2006

(in thousands)



|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | --------------------- | - | ------ | ---------------------- |  | - | ------------------------ | - |  | ------------ | ---- | - |  | - | ------- | -
|                                                                                            |  | Issuer ofNotes |         |   | GuarantorSubsidiaries |   |        | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |     
|CASH FLOWS PROVIDED BY (USED IN ) OPERATING ACTIVITIES:                                     |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Net income                                                                                  |  | $              | 84,489  |   |                       | $ | (609   | )                      |  | $ | 818                      |   |  | $            | (183 | ) |  | $ | 84,515  |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Depreciation and amortization                                                               |  |                | 26,216  |   |                       |   | 380    |                        |  |   | 184                      |   |  |              |     |   |  |   | 26,780  |  
|Unrealized loss on marketable securities                                                    |  |                | 13      |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 13      |  
|Stock based compensation expense                                                            |  |                | 5,772   |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 5,772   |  
|Deferred taxes                                                                              |  |                | 7,582   |   |                       |   | (33    | )                      |  |   |                         |   |  |              |     |   |  |   | 7,549   |  
|Loss on disposal and impairments of property and equipment                                  |  |                | 450     |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 450     |  
|Investments in marketable securities                                                        |  |                | (772    | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (772    | )
|Excess tax benefit from exercise of stock options                                           |  |                | (960    | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (960    | )
|Equity in earnings of subsidiaries                                                          |  |                | (209    | ) |                       |   |       |                        |  |   |                         |   |  |              | 209  |   |  |   |        |  
|Changes in assets and liabilities                                                           |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Accounts receivable, net                                                                    |  |                | 10,358  |   |                       |   | (329   | )                      |  |   | (478                     | ) |  |              |     |   |  |   | 9,551   |  
|Inventory                                                                                   |  |                | (89     | ) |                       |   | (631   | )                      |  |   | (1,259                   | ) |  |              | 6    |   |  |   | (1,973  | )
|Prepaid expenses and other assets                                                           |  |                | 423     |   |                       |   | 1      |                        |  |   | 193                      |   |  |              |     |   |  |   | 617     |  
|Accounts payable                                                                            |  |                | 3,583   |   |                       |   | 196    |                        |  |   | 584                      |   |  |              |     |   |  |   | 4,363   |  
|Income taxes payable                                                                        |  |                | 6,620   |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 6,620   |  
|Accrued expenses and other liabilities                                                      |  |                | 2,082   |   |                       |   | (241   | )                      |  |   | (214                     | ) |  |              | (107 | ) |  |   | 1,520   |  
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                                            |  |                | 145,558 |   |                       |   | (1,266 | )                      |  |   | (172                     | ) |  |              | (75  | ) |  |   | 144,045 |  
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES:                                      |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Purchase of property and equipment                                                          |  |                | (25,539 | ) |                       |   | (990   | )                      |  |   | (293                     | ) |  |              |     |   |  |   | (26,822 | )
|Payment of contingent consideration on Yankee Candle Fundraising                            |  |                | (1,333  | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (1,333  | )
|Cash paid for business acquisitions                                                         |  |                | (22,244 | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (22,244 | )
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH USED IN INVESTING ACTIVITIES                                                       |  |                | (49,116 | ) |                       |   | (990   | )                      |  |   | (293                     | ) |  |              |     |   |  |   | (50,399 | )
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:                                      |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|Repurchases of common stock                                                                 |  |                | (41,977 | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (41,977 | )
|Net proceeds from issuance of common stock                                                  |  |                | 5,557   |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 5,557   |  
|Payments for dividends                                                                      |  |                | (10,097 | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (10,097 | )
|Deferred financing costs                                                                    |  |                | (313    | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (313    | )
|Excess tax benefit from exercise of stock options                                           |  |                | 960     |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 960     |  
|Intercompany                                                                                |  |                | (4,811  | ) |                       |   | 2,480  |                        |  |   | 2,256                    |   |  |              | 75   |   |  |   |        |  
|Net repayments under bank credit agreements                                                 |  |                | (38,000 | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (38,000 | )
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|NET CASH (USED) PROVIDED IN FINANCING ACTIVITIES                                            |  |                | (88,681 | ) |                       |   | 2,480  |                        |  |   | 2,256                    |   |  |              | 75   |   |  |   | (83,870 | )
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|EFFECT EXCHANGE RATE CHANGES ON CASH                                                        |  |                |        |   |                       |   |       |                        |  |   | 342                      |   |  |              |     |   |  |   | 342     |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                   |  |                | 7,761   |   |                       |   | 224    |                        |  |   | 2,133                    |   |  |              |     |   |  |   | 10,118  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                |  |                | 8,906   |   |                       |   | 2,138  |                        |  |   | 1,611                    |   |  |              |     |   |  |   | 12,655  |  
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  
|CASH AND CASH EQUIVALENTS, END OF YEAR                                                      |  | $              | 16,667  |   |                       | $ | 2,362  |                        |  | $ | 3,744                    |   |  | $            |     |   |  | $ | 22,773  |  
|                                                                                            |  |                |         |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |         |  



36



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YANKEE HOLDING CORP. AND SUBSIDIARIES (PREDECESSOR)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Fifty-Two Weeks Ended December 31, 2005

(in thousands)



|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | --------------------- | - | ------ | ---------------------- |  | - | ------------------------ | - |  | ------------ | ---- | - |  | - | -------- | -
|                                                                                            |  | Issuer ofNotes |          |   | GuarantorSubsidiaries |   |        | NonGuarantorSubsidiary |  |   | IntercompanyEliminations |   |  | Consolidated |     
|CASH FLOWS PROVIDED BY (USED IN ) OPERATING ACTIVITIES:                                     |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|Net income                                                                                  |  | $              | 78,305   |   |                       | $ | 662    |                        |  | $ | (149                     | ) |  | $            | (717 | ) |  | $ | 78,101   |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|Depreciation and amortization                                                               |  |                | 24,521   |   |                       |   | 61     |                        |  |   | 206                      |   |  |              |     |   |  |   | 24,788   |  
|Unrealized gain on marketable securities                                                    |  |                | (5       | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (5       | )
|Stock based compensation expense                                                            |  |                | 3,418    |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 3,418    |  
|Deferred taxes                                                                              |  |                | 8,154    |   |                       |   | (290   | )                      |  |   |                         |   |  |              |     |   |  |   | 7,864    |  
|Loss on disposal and impairments of property and equipment                                  |  |                | 2,858    |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 2,858    |  
|Investments in marketable securities                                                        |  |                | (719     | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (719     | )
|Equity in earnings of subsidiaries                                                          |  |                | (513     | ) |                       |   |       |                        |  |   |                         |   |  |              | 513  |   |  |   |         |  
|Changes in assets and liabilities                                                           |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|Accounts receivable, net                                                                    |  |                | (12,721  | ) |                       |   | (405   | )                      |  |   | (1,735                   | ) |  |              |     |   |  |   | (14,861  | )
|Inventory                                                                                   |  |                | (6,168   | ) |                       |   | (132   | )                      |  |   | (2,858                   | ) |  |              | 549  |   |  |   | (8,609   | )
|Prepaid expenses and other assets                                                           |  |                | (789     | ) |                       |   | (89    | )                      |  |   | (201                     | ) |  |              |     |   |  |   | (1,079   | )
|Accounts payable                                                                            |  |                | 439      |   |                       |   | 100    |                        |  |   | 352                      |   |  |              |     |   |  |   | 891      |  
|Income taxes payable                                                                        |  |                | (4,459   | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (4,459   | )
|Accrued expenses and other liabilities                                                      |  |                | 15,506   |   |                       |   | 2,040  |                        |  |   | 1,268                    |   |  |              | (459 | ) |  |   | 18,355   |  
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                                            |  |                | 107,827  |   |                       |   | 1,947  |                        |  |   | (3,117                   | ) |  |              | (114 | ) |  |   | 106,543  |  
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES:                                      |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|Purchase of property and equipment                                                          |  |                | (34,659  | ) |                       |   | (85    | )                      |  |   | (128                     | ) |  |              |     |   |  |   | (34,872  | )
|Purchase of intangible assets                                                               |  |                | (604     | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (604     | )
|Cash paid for business acquisitions                                                         |  |                |         |   |                       |   | (4,180 | )                      |  |   |                         |   |  |              |     |   |  |   | (4,180   | )
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|NET CASH USED IN INVESTING ACTIVITIES                                                       |  |                | (35,263  | ) |                       |   | (4,265 | )                      |  |   | (128                     | ) |  |              |     |   |  |   | (39,656  | )
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:                                      |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|Repurchases of common stock                                                                 |  |                | (184,995 | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (184,995 | )
|Net proceeds from issuance of common stock                                                  |  |                | 3,029    |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 3,029    |  
|Payments for dividends                                                                      |  |                | (11,182  | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (11,182  | )
|Deferred financing costs                                                                    |  |                | (343     | ) |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | (343     | )
|Intercompany                                                                                |  |                | (8,301   | ) |                       |   | 4,420  |                        |  |   | 3,767                    |   |  |              | 114  |   |  |   |         |  
|Net borrowings under bank credit agreements                                                 |  |                | 103,000  |   |                       |   |       |                        |  |   |                         |   |  |              |     |   |  |   | 103,000  |  
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|NET CASH (USED) PROVIDED IN FINANCING ACTIVITIES                                            |  |                | (98,792  | ) |                       |   | 4,420  |                        |  |   | 3,767                    |   |  |              | 114  |   |  |   | (90,491  | )
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|EFFECT EXCHANGE RATE CHANGES ON CASH                                                        |  |                |         |   |                       |   |       |                        |  |   | (165                     | ) |  |              |     |   |  |   | (165     | )
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                        |  |                | (26,228  | ) |                       |   | 2,102  |                        |  |   | 357                      |   |  |              |     |   |  |   | (23,769  | )
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                |  |                | 35,134   |   |                       |   | 36     |                        |  |   | 1,254                    |   |  |              |     |   |  |   | 36,424   |  
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  
|CASH AND CASH EQUIVALENTS, END OF YEAR                                                      |  | $              | 8,906    |   |                       | $ | 2,138  |                        |  | $ | 1,611                    |   |  | $            |     |   |  | $ | 12,655   |  
|                                                                                            |  |                |          |   |                       |   |        |                        |  |   |                          |   |  |              |      |   |  |   |          |  



37



---

21. VALUATION AND QUALIFYING ACCOUNTS



|                                              |  |                                   |       |                             |   |                         |  |   |                             |   |  |   |      
|--------------------------------------------- |  | --------------------------------- | ----- | --------------------------- | - | ----------------------- |  | - | --------------------------- | - |  | - | -----
|Allowance for Doubtful Accounts               |  | Balance atBeginning ofFiscal Year |       | Charged toCosts andExpenses |   | Deductions FromReserves |  |   | Balance atEnd ofFiscal Year
|Period February 6, 2007 to December 29, 2007: |  |                                   |       |                             |   |                         |  |   |                             |   |  |   |      
|Allowance for doubtful accounts               |  | $                                 | 921   |                             | $ | 1,490                   |  | $ | (78                         | ) |  | $ | 2,333
|                                              |  |                                   |       |                            
|Period December 31, 2006 to February 5, 2007: |  |                                   |       |                             |   |                         |  |   |                             |   |  |   |      
|Allowance for doubtful accounts               |  | $                                 | 928   |                             | $ | 22                      |  | $ | (29                         | ) |  | $ | 921  
|                                              |  |                                   |       |                            
|Year Ended December 30, 2006:                 |  |                                   |       |                             |   |                         |  |   |                             |   |  |   |      
|Allowance for doubtful accounts               |  | $                                 | 1,087 |                             | $ | 252                     |  | $ | (411                        | ) |  | $ | 928  
|                                              |  |                                   |       |                            
|Year Ended December 31, 2005                  |  |                                   |       |                             |   |                         |  |   |                             |   |  |   |      
|Allowance for doubtful accounts               |  | $                                 | 765   |                             | $ | 724                     |  | $ | (402                        | ) |  | $ | 1,087

Amounts charged to deductions from reserves represent the write-off of uncollectible balances.

22. QUARTERLY FINANCIAL DATA (UNAUDITED)



|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  
|-------------------------------------------------------------- |  | ------------------------------------------ | ------ | - |  |  | --------------------------------------- | - | ------- | -------------------------------- |  | - | ------------------------------------- | - |  | ------------------------------------ | ------- | - |  | - | ------- | -
|                                                               |  | Predecessor                                |        |   |  |  | Successor                               |  
|                                                               |  | PeriodDecember 31, 2006to February 5, 2007 |        |   |  |  | PeriodFebruary 6, 2007to March 31, 2007 |   |         | Thirteen WeeksEndedJune 30, 2007 |  |   | Thirteen WeeksEndedSeptember 29, 2007 |   |  | Thirteen WeeksEndedDecember 29, 2007 |        
|                                                               |  | (Dollars in Thousands)                     |        |   |  |  | (Dollars in Thousands)                  |  
|Sales                                                          |  | $                                          | 53,382 |   |  |  |                                         | $ | 89,617  |                                  |  | $ | 133,415                               |   |  | $                                    | 175,815 |   |  | $ | 284,726 |  
|Cost of sales                                                  |  |                                            | 24,553 |   |  |  |                                         |   | 66,109  |                                  |  |   | 72,918                                |   |  |                                      | 78,162  |   |  |   | 112,383 |  
|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  
|Gross profit                                                   |  |                                            | 28,829 |   |  |  |                                         |   | 23,508  |                                  |  |   | 60,497                                |   |  |                                      | 97,653  |   |  |   | 172,343 |  
|Selling expenses                                               |  |                                            | 16,201 |   |  |  |                                         |   | 29,443  |                                  |  |   | 47,610                                |   |  |                                      | 51,530  |   |  |   | 63,816  |  
|General and administrative expenses                            |  |                                            | 13,828 |   |  |  |                                         |   | 11,822  |                                  |  |   | 18,431                                |   |  |                                      | 16,313  |   |  |   | 16,150  |  
|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  
|(Loss) income from operations                                  |  |                                            | (1,200 | ) |  |  |                                         |   | (17,757 | )                                |  |   | (5,544                                | ) |  |                                      | 29,810  |   |  |   | 92,377  |  
|Interest income                                                |  |                                            | (1     | ) |  |  |                                         |   | (12     | )                                |  |   | (8                                    | ) |  |                                      | (15     | ) |  |   | (9      | )
|Interest expense                                               |  |                                            | 986    |   |  |  |                                         |   | 15,863  |                                  |  |   | 25,578                                |   |  |                                      | 25,619  |   |  |   | 25,382  |  
|Other (income) expense                                         |  |                                            | (15    | ) |  |  |                                         |   | (10     | )                                |  |   | (676                                  | ) |  |                                      | (35     | ) |  |   | (430    | )
|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  
|(Loss) income before (benefit from) provision for income taxes |  |                                            | (2,170 | ) |  |  |                                         |   | (33,598 | )                                |  |   | (30,438                               | ) |  |                                      | 4,241   |   |  |   | 67,434  |  
|(Benefit from) provision for income taxes                      |  |                                            | (340   | ) |  |  |                                         |   | (12,866 | )                                |  |   | (13,773                               | ) |  |                                      | 1,047   |   |  |   | 28,705  |  
|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  
|Net (loss) income                                              |  | $                                          | (1,830 | ) |  |  |                                         | $ | (20,732 | )                                |  | $ | (16,665                               | ) |  | $                                    | 3,194   |   |  | $ | 38,729  |  
|                                                               |  |                                            |        |   |  |  |                                         |   |         |                                  |  |   |                                       |   |  |                                      |         |   |  |   |         |  



|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  
|---------------------------------------- |  | ---------------------- | ------- | - | ----------- | - | ------- | ----------------- |  | - | ---------------- | - |  | - | ------- | -
|                                         |  | Predecessor            |        
|                                         |  | Thirteen Weeks Ended   |        
|                                         |  | April 1,2006           |         |   | July 1,2006 |   |         | September 30,2006 |  |   | December 30,2006 |  
|                                         |  | (Dollars in Thousands) |        
|Sales                                    |  | $                      | 133,914 |   |             | $ | 116,251 |                   |  | $ | 159,604          |   |  | $ | 277,790 |  
|Cost of sales                            |  |                        | 61,936  |   |             |   | 53,115  |                   |  |   | 72,981           |   |  |   | 109,307 |  
|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  
|Gross profit                             |  |                        | 71,978  |   |             |   | 63,136  |                   |  |   | 86,623           |   |  |   | 168,483 |  
|Selling expenses                         |  |                        | 37,267  |   |             |   | 36,582  |                   |  |   | 40,670           |   |  |   | 53,675  |  
|General and administrative expenses      |  |                        | 15,464  |   |             |   | 15,056  |                   |  |   | 17,015           |   |  |   | 25,601  |  
|Restructuring credit                     |  |                        |        |   |             |   |        |                   |  |   |                 |   |  |   | (397    | )
|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  
|Income from operations                   |  |                        | 19,247  |   |             |   | 11,498  |                   |  |   | 28,938           |   |  |   | 89,604  |  
|Interest income                          |  |                        | (7      | ) |             |   | (6      | )                 |  |   | (7               | ) |  |   | (10     | )
|Interest expense                         |  |                        | 2,788   |   |             |   | 3,740   |                   |  |   | 4,682            |   |  |   | 4,147   |  
|Other (income) expense                   |  |                        | (145    | ) |             |   | (148    | )                 |  |   | (165             | ) |  |   | 354     |  
|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  
|Income before provision for income taxes |  |                        | 16,611  |   |             |   | 7,912   |                   |  |   | 24,428           |   |  |   | 85,113  |  
|Provision for income taxes               |  |                        | 4,140   |   |             |   | 3,086   |                   |  |   | 9,527            |   |  |   | 32,796  |  
|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  
|Net income                               |  | $                      | 12,471  |   |             | $ | 4,826   |                   |  | $ | 14,901           |   |  | $ | 52,317  |  
|                                         |  |                        |         |   |             |   |         |                   |  |   |                  |   |  |   |         |  



38



---

PART IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------



|    |  |                                                                                                                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Consolidated Financial Statements                                                                                                                                                                                                                                              
|    | 
|    |  | The consolidated financial statements listed below are included in this document under Item 8.                                                                                                                                                                                 
|    | 
|    |  | Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements                                                                                                                                                                               
|    |  | Consolidated Balance Sheets                                                                                                                                                                                                                                                    
|    |  | Consolidated Statements of Operations                                                                                                                                                                                                                                          
|    |  | Consolidated Statements of Stockholders Equity                                                                                                                                                                                                                                
|    |  | Consolidated Statements of Cash Flows                                                                                                                                                                                                                                          
|    |  | Notes to Consolidated Financial Statements                                                                                                                                                                                                                                     
|    | 
|(b) |  | Exhibits                                                                                                                                                                                                                                                                       
|    | 
|    |  | See the exhibit index accompanying this filing.                                                                                                                                                                                                                                
|    | 
|(c) |  | Financial Statement Schedules                                                                                                                                                                                                                                                  
|    | 
|    |  | All schedules for which provision is made in the applicable regulations of the Securities and Exchange Commission have been omitted because the information is disclosed in the Consolidated
Financial Statements or because such schedules are not required or not applicable.



39



---

SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) 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, on May 20, 2008.



YANKEE HOLDING CORP.By

/s/ CRAIG W. RYDINCraig W. RydinChief Executive Officer




40



---

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                    
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                        
|1.1         |  | Purchase Agreement, dated February 1, 2007, among Yankee Acquisition Corp., Yankee Holding Corp., Merrill Lynch, Fenner, Pierce & Smith Incorporated and Lehman Brothers Inc., filed with The
Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                  
|            | 
|1.2         |  | Joinder to Purchase Agreement, dated February 6, 2007, among The Yankee Candle Company, Inc., Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift Distributors, Inc. and Aroma
Naturals, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.
|            | 
|2.1         |  | Agreement and Plan of Merger, dated October 24, 2006, among YCC Holdings LLC, Yankee Acquisition Corp. and The Yankee Candle Company, Inc., filed with The Yankee Candle Companys Form S-4
filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                     
|            | 
|3.1         |  | Amended and Restated Certificate of Incorporation of The Yankee Candle Company, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and
incorporated herein by reference.                                                                                                                           
|            | 
|3.2         |  | Amended and Restated By-laws of The Yankee Candle Company, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                
|            | 
|3.3         |  | Certificate of Incorporation of Yankee Holding Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                           
|            | 
|3.4         |  | Certificate of Amendment to the Certificate of Incorporation of Yankee Holding Corp., filed as Exhibit 3.1 to Yankee Holding Corp.s Form 10-Q filed on November 8, 2007 for the quarter
ended September 29, 2007, is incorporated herein by reference.                                                                                            
|            | 
|3.5         |  | By-Laws of Yankee Holding Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                                                                                
|            | 
|3.6         |  | Certificate of Formation of Yankee Candle Admin LLC, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                            
|            | 
|3.7         |  | Operating Agreement of Yankee Candle Admin LLC, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                 
|            | 
|3.8         |  | Certificate of Incorporation of Yankee Candle Restaurant Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                 
|            | 
|3.9         |  | By-Laws of Yankee Candle Restaurant Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                      
|            | 
|3.10        |  | Certificate of Incorporation of Quality Gift Distributors, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                
|            | 
|3.11        |  | By-Laws of Quality Gift Distributors, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                     
|            | 
|3.12        |  | Certificate of Incorporation of Aroma Naturals, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                           



41



---

|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                               
|3.13        |  | By-Laws of Aroma Naturals, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                                       
|            | 
|3.14        |  | Certificate of Formation of YCC Holdings LLC, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                                                          
|            | 
|3.15        |  | Limited Liability Company Agreement of YCC Holdings LLC, dated as of February 6, 2007, by and among the initial members identified therein, filed with The Yankee Candle Companys Form S-4
filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                                            
|            | 
|4.1         |  | Senior Note Indenture, dated as of February 6, 2007, among Yankee Acquisition Corp., Yankee Holding Corp. and HSBC BANK, USA, NATIONAL ASSOCIATION, as Trustee, filed with The Yankee Candle
Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                        
|            | 
|4.2         |  | Senior Note Supplemental Indenture, dated February 6, 2007, among The Yankee Candle Company, Inc., Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift Distributors, Inc. and
Aroma Naturals, Inc. and HSBC BANK, USA, NATIONAL ASSOCIATION, as Trustee, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.             
|            | 
|4.3         |  | Senior Note Notation of Guaranty, dated February 6, 2007, among Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift Distributors, Inc. and Aroma Naturals, Inc., filed with The
Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                     
|            | 
|4.4         |  | Senior Note Notation of Guaranty, dated February 6, 2007 of Yankee Holding Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and
incorporated herein by reference.                                                                                                                                                                                                      
|            | 
|4.5         |  | Senior Subordinated Note Indenture, dated as of February 6, 2007, among Yankee Acquisition Corp., Yankee Holding Corp. and HSBC BANK, USA, NATIONAL ASSOCIATION, as Trustee, filed with The Yankee
Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                           
|            | 
|4.6         |  | Senior Subordinated Note Supplemental Indenture, dated February 6, 2007, among The Yankee Candle Company, Inc., Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift
Distributors, Inc. and Aroma Naturals, Inc. and HSBC BANK, USA, NATIONAL ASSOCIATION, as Trustee, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.
|            | 
|4.7         |  | Senior Subordinated Note Notation of Guaranty, dated February 6, 2007, among Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift Distributors, Inc. and Aroma Naturals, Inc.,
filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                        
|            | 
|4.8         |  | Senior Subordinated Note Notation of Guaranty, dated February 6, 2007 of Yankee Holding Corp., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699)
and incorporated herein by reference.                                                                                                                                                                                         
|            | 
|4.9         |  | Registration Rights Agreement, dated February 6, 2007, among Yankee Acquisition Corp., Yankee Holding Corp., Merrill Lynch, Fenner, Pierce & Smith Incorporated and Lehman Brothers Inc.,
filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                              
|            | 
|4.10        |  | Registration Rights Joinder Agreement, dated February 6, 2007, among The Yankee Candle Company, Inc., Yankee Candle Admin LLC, Yankee Candle Restaurant Corp., Quality Gift Distributors, Inc. and
Aroma Naturals, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                               



42



---

|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.11        |  | Form of Senior Note (attached as exhibit to Exhibit 4.1), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                                                                                                             
|            | 
|4.12        |  | Form of Senior Subordinated Note (attached to Exhibit 4.5), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                                                                                                           
|            | 
|4.13        |  | Second Supplemental Indenture, dated as of August 21, 2007, by and among The Yankee Candle Company, Inc and the guarantors listed therein and HSBC Bank USA N.A., as trustee relating to the 93/4% Senior Subordinated Notes due 2017,
filed as Exhibit 4.1 to Yankee Holding Corp.s Form 10-Q filed on November 8, 2007 for the quarter ended September 29, 2007, is incorporated herein by reference.                                                                                 
|            | 
|4.14        |  | Second Supplemental Indenture, dated as of August 21, 2007, by and among The Yankee Candle Company, Inc and the guarantors listed therein and HSBC Bank USA N.A., as trustee 81/2% Senior Notes due 2017, filed as Exhibit 4.2 to
Yankee Holding Corp.s Form 10-Q filed on November 8, 2007 for the quarter ended September 29, 2007, is incorporated herein by reference.                                                                                                              
|            | 
|10.1        |  | Credit Agreement, dated as of February 6, 2007, among Yankee Acquisition Corp., Yankee Holding Corp., The Yankee Candle Company, Inc., the lenders party thereto, Lehman Commercial Paper Inc.,
Sovereign Bank, Wells Fargo Retail Finance, LLC, Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated
herein by reference.                         
|            | 
|10.2        |  | Guarantee and Collateral Agreement, dated as of February 6, 2007 among Lehman Commercial Paper Inc., Yankee Holding Corp., Yankee Acquisition Corp., The Yankee Candle Company, Inc., Merrill
Lynch Capital Corporation, Sovereign Bank, Wells Fargo Retail Finance, LLC, Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No.
333-141699) and incorporated herein by reference.
|            | 
|10.3        |  | Term Loan Promissory Note, dated February 6, 2007, by the Borrowers party thereto, in favor of Sovereign Bank, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg
No. 333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                        
|            | 
|10.4        |  | Term Loan Promissory Note, dated February 6, 2007, by the Borrowers party thereto, in favor of Citizens Bank of Massachusetts, filed with The Yankee Candle Companys Form S-4 filed on March
30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                                                                                                                        
|            | 
|10.5        |  | Term Loan Promissory Note, dated February 6, 2007, by the Borrowers party thereto, in favor of CIT, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No.
333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                                   
|            | 
|10.6        |  | Revolving Credit Note, dated February 6, 2007, by the Borrowers party thereto, in favor of Sovereign Bank, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No.
333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                            
|            | 
|10.7        |  | Revolving Credit Note, by the Borrowers party thereto, in favor of Citizens Bank of Massachusetts, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No.
333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                                    
|            | 
|10.8        |  | Employment Agreement, dated February 6, 2007, between The Yankee Candle Company, Inc. and Craig W. Rydin, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No.
333-141699) and incorporated herein by reference.                                                                                                                                                                                                                                             
|            | 
|10.9        |  | YCC Holdings LLC 2007 Incentive Equity Plan, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                                                                                                                          



43



---

|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                    
|10.10       |  | Form of Class A Unit Purchase Agreement (executive committee), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                              
|            | 
|10.11       |  | Form of Class A Unit Purchase Agreement (non-executive committee), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                          
|            | 
|10.12       |  | Class A Unit Purchase Agreement, dated February 6, 2007, between YCC Holdings LLC and Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C, L.P., and Madison
Dearborn Partners V Executive-A, L.P., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                          
|            | 
|10.13       |  | Form of Class B Unit Purchase Agreement (executive committee), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                              
|            | 
|10.14       |  | Form of Class B Unit Purchase Agreement (non-executive committee), filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                                                                                                                                                                                          
|            | 
|10.15       |  | Unitholders Agreement, dated February 6, 2007, by and among YCC Holdings LLC, Madison Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners C-A, L.P., Madison Dearborn Capital
Partners V Executive-A, L.P., and each of the other persons listed therein, filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.
|            | 
|10.16       |  | Management Services Agreement, dated as of February 6, 2007, by and between the Yankee Candle Company, Inc. and Madison Dearborn Partners V-B, L.P., filed with The Yankee Candle Companys
Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by reference.                                                                                                                        
|            | 
|10.17       |  | The Yankee Candle Company, Inc. 1999 Stock Option Award Plan, filed as Exhibit 10.5 to The Yankee Candle Company, Inc.s Form S-1 filed on June 4, 1999, is incorporated herein by reference.                                                                                                                                                                                                                  
|            | 
|10.18       |  | Form of Stockholders Agreement between The Yankee Candle Company, Inc. and employees, filed as Exhibit 10.7 to The Yankee Candle Company, Inc.s Form S-1 filed on May 20, 1999, is
incorporated herein by reference.                                                                                                                                                                                         
|            | 
|10.19       |  | Form of Executive Severance Agreement, filed as Exhibit 10.1 to The Yankee Candle Company, Inc.s Form 8-K filed on September 20, 2006, is incorporated herein by reference.                                                                                                                                                                                                                                   
|            | 
|10.20       |  | Special Retention Bonus Plan dated as of September 14, 2006, filed as Exhibit 10.2 to The Yankee Candle Company, Inc.s Form 8-K filed on September 20, 2006, is incorporated herein by
reference.                                                                                                                                                                                                             
|            | 
|10.21       |  | Amended and Restated Executive Deferred Compensation Plan, filed as Exhibit 10.3 to The Yankee Candle Company, Inc.s Form 8-K filed on September 20, 2006, is incorporated herein by
reference.                                                                                                                                                                                                               
|            | 
|10.22       |  | The Yankee Candle Company, Inc. 2005 Stock Option and Award Plan, filed as Exhibit 99.1 to The Yankee Candle Company, Inc.s Form 8-K filed on June 8, 2005, is incorporated herein by
reference.                                                                                                                                                                                                              
|            | 
|10.23       |  | Form of Indemnification Agreement between The Yankee Candle Company, Inc. and its directors and executive officers, filed as Exhibit 99.3 to The Yankee Candle Company, Inc.s Form 8-K dated
June 8, 2005, is incorporated herein by reference.                                                                                                                                                               
|            | 
|10.24       |  | Form of Award of Performance Shares Agreement, filed as Exhibit 10.16 to The Yankee Candle Company, Inc.s Form 10-K filed on March 15, 2005, is incorporated herein by
reference.                                                                                                                                                                                                                             



44



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|            |  |                                                                                                                                                                                                                              
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                  
|10.25       |  | Management Incentive Plan for 2006 Fiscal Year, filed as Exhibit 99.1 to The Yankee Candle Company, Inc.s Form 8-K filed on March 2, 2006, is incorporated herein by
reference.                                             
|            | 
|10.26       |  | 2006 Director Compensation Plan, filed as Exhibit 99.2 to The Yankee Candle Company, Inc.s Form 8-K filed on March 2, 2006, is incorporated herein by reference.                                                            
|            | 
|10.27       |  | Form of outside director Stock Option Agreement, filed as Exhibit 10.1 to The Yankee Candle Company, Inc.s Form S-1 filed on May 20, 1999, is incorporated herein by
reference.                                             
|            | 
|10.28       |  | The Yankee Candle Company Inc. Employee Stock Option Plan and form of Stock Option Agreement, filed as Exhibit 10.4 to The Yankee Candle Company, Inc.s Form S-1 filed on May 20, 1999, is
incorporated herein by reference.
|            | 
|10.29       |  | Form of Restricted Stock Agreement (executives), filed as Exhibit 10.1 to The Yankee Candle Company, Inc.s Form 8-K filed on March 14, 2006, is incorporated herein by
reference.                                           
|            | 
|10.30       |  | Form of Restricted Stock Agreement (directors), filed as Exhibit 10.3 to The Yankee Candle Company, Inc.s Form 8-K filed on March 14, 2006, is incorporated herein by
reference.                                            
|            | 
|21.1        |  | Subsidiaries of The Yankee Candle Company, Inc., filed with The Yankee Candle Companys Form S-4 filed on March 30, 2007 (Reg No. 333-141699) and incorporated herein by
reference.                                          
|            | 
|*31.1       |  | Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|            | 
|*31.2       |  | Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|            | 
|*32.1       |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                  
|            | 
|*32.2       |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                  



|* | Filed herewith.
|- | ---------------



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