In the United States, the QSR segment is the largest segment of the restaurant industry and has demonstrated steady growth over a long period of time. According to NPD Group, Inc., which prepares and disseminates the Consumer Report of Eating Share Trends (CREST), QSR sales have grown at an average annual rate of 4.8% over the past 10 years, totaling approximately $206 billion for the year ended October 31, 2005 and up 4.5% over the same period last year. According to NPD Group, Inc., QSR sales are projected to increase at an annual rate of 4% between 2006 and 2011.

According to NPD Group, Inc., the FFHR category is the largest category in the QSR segment, generating sales of over $50 billion in the United States for the year ended October 31, 2005, representing 27% of total QSR sales. The FFHR category grew 3.6% in terms of sales during the same period and, according to NPD Group, Inc., is expected to increase at an average rate of 4.2% per year over the next five years. For the year ended October 31, 2005, the top three FFHR chains (McDonald’s, Burger King and Wendy’s) accounted for 73% of the category’s total sales, with 15% attributable to Burger King.

The FFHR category is highly competitive with respect to price, service, location and food quality. During the past year, the FFHR category has experienced flat or declining customer traffic, although sales are up due to the sale of premium products.

The Company’s restaurants are limited-service restaurants of distinctive design and are generally located in high-traffic areas throughout the United States and Canada. The Company’s restaurants consist of several different building types with various seating capacities. The traditional restaurant is free-standing, ranging in size from approximately 1,900 to 4,300 square feet, with seating capacity of 40 to 120 customers, drive-thru facilities and adjacent parking areas. Some restaurants are located in institutional locations, such as airports, shopping malls, toll road rest areas and educational and sports facilities.

EMEA is the second largest geographic area in the Burger King system behind the United States. At December 31, 2005, EMEA had 2,115 restaurants in 27 countries and territories, including 287 company restaurants located in the United Kingdom, Germany, Spain and the Netherlands. The United Kingdom is the largest market in EMEA with 648 restaurants at December 31, 2005.

At December 31, 2005, APAC had 623 restaurants in 12 countries and territories, including China, Malaysia, Thailand, Australia, Philippines, Taiwan, Singapore, New Zealand, Japan and South Korea, with total APAC sales of approximately $650 million for fiscal 2005. Australia is the largest market in APAC, with 295 restaurants at December 31, 2005, all of which operate under Hungry Jack’s, a brand that the Company owns in Australia and New Zealand.

At December 31, 2005, the Company had 769 restaurants in 26 countries and territories in Latin America, with total system sales in fiscal 2005 of approximately $669 million. There were 63 company restaurants in Latin America, all located in Mexico, and 706 franchise restaurants in the region at December 31, 2005. The Mexican market is the largest in the region, with a total of 277 restaurants at December 31, 2005, or 36% of the region. In fiscal 2005, the Company opened 45 new restaurants in Mexico, of which nine were company restaurants and 36 franchise restaurants, and it is the market leader in 13 of its 26 markets in Latin America, including Puerto Rico, in terms of number of restaurants.

Franchise revenues increased 1% to $209 million in the first six months of fiscal 2006 compared to the same period in fiscal 2005.

Property revenues declined by $2 million to $57 million in the first six months of fiscal 2006.

Property expenses decreased by $2 million to $28 million in the first six months of fiscal 2006 from the same period in fiscal 2005.

Other operating income, net was $3 million in the first six months of fiscal 2006 compared to operating expenses, net of $3 million in the same period in fiscal 2005.

Interest expense, net was $34 million in the first six months of fiscal 2006 and in fiscal 2005.