Yum! Brands · Earnings release

NEWS

Yum! Brands Reports Second-Quarter Results

KFC International Unit Growth 7% and Taco Bell Same-Store Sales Growth 4%;

Over $9 Billion Digital System Sales with Record 57% Digital Sales Mix

Louisville, KY (August 5, 2025) - Yum! Brands, Inc. (NYSE: YUM) today reported results for the second quarter ending June 30, 2025. Second-quarter GAAP EPS was $1.33 and second-quarter EPS excluding Special Items was $1.44, a 7% increase year-over-year.

DAVID GIBBS COMMENTS

David Gibbs, CEO, said "Our second-quarter results are a testament to the power of our bold food innovation, digital transformation, and the strength of our iconic brands. Taco Bell U.S. meaningfully outpaced the category with 4% same-store sales growth, and KFC International opened 565 gross new units. I am confident that with our strong development across the system, improving value propositions, and exciting new uses of our proprietary, integrated tech stack, Yum! is well positioned to win in an ever-changing consumer landscape. As I reflect on my incredible 36-year journey with Yum!, it’s been a joy to bring our iconic brands to consumers around the world in collaboration with our world-class franchise partners and team members.

Yum! is in an enviable position with the very best talent and leaders in this industry at the helm of our global brands. I couldn’t be more confident passing the torch to Chris Turner, whose deep understanding of our business and bold vision will continue to propel Yum! forward."

RECENT STRATEGIC ANNOUNCEMENTS

•On June 17th, we announced that the Board of Directors unanimously elected Chris Turner to succeed David Gibbs as Chief Executive Officer, effective October 1, 2025. David will serve as an adviser to the Company until the end of 2026 to ensure a seamless transition. Chris has served as Chief Financial Officer since 2019 and expanded his role to include Chief Franchise Officer in 2024. During his time at Yum!, Chris has been instrumental in driving bold actions including transforming the digital and technology organization, launching Byte by Yum!, centralizing Yum!'s global supply chain, and driving ideation for new, bold concepts within our portfolio.

•On June 26th, Taco Bell announced plans to scale its innovative beverage concept Live Más Café to 30 locations by the end of 2025. The concept offers over 30 signature beverages, from Churro Chillers and specialty coffees to Refrescas and Dirty Mountain Dew® Baja Blast® Dream Sodas. This launch is part of the brand’s long-term beverage strategy to reach $5 billion in beverage sales by 2030.

SECOND-QUARTER HIGHLIGHTS

•Worldwide system sales grew 4%, excluding foreign currency translation, led by Taco Bell at 6% and KFC at 5%.

•Unit count increased 3% including 871 gross new units in the quarter.

•Robust digital system sales exceeding $9 billion, with record digital mix of approximately 57%.

•Foreign currency translation favorably impacted divisional operating profit by $4 million.

Reported Results

% Change

System Sales

Ex F/X

Same-Store Sales

Units

GAAP Operating Profit

Core

Operating Profit1

KFC Division

+5

+2

+5

+9

+8

Taco Bell Division

+6

+4

+2

+5

+5

Pizza Hut Division

(1)

(1)

Even

Worldwide

+4

+2

+3

+2

+2

Second-Quarter

Year-to-Date

% Change

% Change

GAAP EPS

+4

(6)

Less Special Items EPS1

NM

NM

EPS Excluding Special Items

+7

1 See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Core Operating Profit and Special Items.

All comparisons are versus the same period a year ago.

System sales growth figures exclude foreign currency translation ("F/X") and core operating profit growth figures exclude F/X and Special Items. Special Items are not allocated to any segment and therefore only impact worldwide GAAP results. See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further details.

Digital system sales includes all transactions at system restaurants where consumers utilize ordering interaction that is primarily facilitated by automated technology.

Yum! Brands, Inc. • 1900 Colonel Sanders Lane • Louisville, KY 40213 • P: 502 874-8300 • investors.yum.com

KFC DIVISION

Second-Quarter

Year-to-Date

%/ppts Change

%/ppts Change

Reported

Ex F/X

Reported

Ex F/X

Restaurants

+5

N/A

+5

N/A

System Sales ($MM)

+6

+5

+4

+5

Same-Store Sales Growth (%)

+2

(3)

NM

NM

+2

(3)

NM

NM

Franchise and Property Revenues ($MM)

+8

+7

+5

+6

Operating Profit ($MM)

+9

+8

+8

+8

Operating Margin (%)

Second-Quarter (% Change)

Year-to-Date (% Change)

International

U.S.

International

U.S.

System Sales Growth Ex F/X

+7

(8)

+7

(5)

Same-Store Sales Growth

+3

(5)

+3

(3)

•KFC Division opened 566 gross new restaurants across 58 countries.

•Company-owned restaurant margins were 12.1%, up slightly year-over-year.

•Foreign currency translation favorably impacted operating profit by $4 million.

KFC Markets1

Percent of KFC System Sales2

System Sales Growth Ex F/X

Second-Quarter

(% Change)

Year-to-Date

(% Change)

China

+5

+4

United States

(8)

(5)

Europe

+7

+7

Asia

+9

Latin America

8%

Australia

7%

+3

+2

United Kingdom

6%

+5

+5

Middle East / Turkey / North Africa

6%

Africa

5%

Canada

2%

+9

India

2%

+9

1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets.

Yum! Brands, Inc. • 1900 Colonel Sanders Lane • Louisville, KY 40213 • P: 502 874-8300 • investors.yum.com

TACO BELL DIVISION

Second-Quarter

Year-to-Date

%/ppts Change

%/ppts Change

Reported

Ex F/X

Reported

Ex F/X

Restaurants

+2

N/A

+2

N/A

System Sales ($MM)

+6

+6

+8

+8

Same-Store Sales Growth (%)

+4

+5

NM

NM

+6

+3

NM

NM

Franchise and Property Revenues ($MM)

+6

+6

+9

+9

Operating Profit ($MM)

+5

+5

Operating Margin (%)

•Taco Bell Division opened 50 gross new restaurants across 10 countries.

•Taco Bell U.S. system sales grew 6% and Taco Bell International system sales excluding foreign currency translation, grew 11%.

•Taco Bell U.S. and Taco Bell International same-store sales both grew 4%.

•Taco Bell U.S. company-owned restaurant margins were 24.5%, a 110 basis point decrease year-over-year.

PIZZA HUT DIVISION

Second-Quarter

Year-to-Date

%/ppts Change

%/ppts Change

Reported

Ex F/X

Reported

Ex F/X

Restaurants

Even

N/A

Even

N/A

System Sales ($MM)

(1)

(1)

(3)

(2)

Same-Store Sales Growth (%)

(1)

(3)

NM

NM

(1)

(5)

NM

NM

Franchise and Property Revenues ($MM)

(1)

(1)

(2)

(2)

Operating Profit ($MM)

Operating Margin (%)

Second-Quarter (% Change)

Year-to-Date (% Change)

International

U.S.

International

U.S.

System Sales Growth Ex F/X

+2

(6)

+1

(7)

Same-Store Sales Growth

+2

(5)

+1

(5)

•Pizza Hut Division opened 254 gross new restaurants across 32 countries.

•Pizza Hut Division operating profit growth was negatively impacted in the quarter by 3 percentage points due to timing of technology spending within Franchise advertising and other services expense, 2 percentage points due to expense associated with three franchise entities that are transitioning to new ownership and 2 percentage points due to expenses associated with our bi-annual Global Franchise Convention.

•Foreign currency translation had a negligible impact on operating profit.

3

Pizza Hut Markets1

Percent of Pizza Hut System Sales2

System Sales Growth Ex F/X

Second-Quarter

(% Change)

Year-to-Date

(% Change)

United States

(6)

(7)

China

+1

Even

Asia

+7

+5

Europe

Even

(2)

Latin America

7%

Even

(3)

Middle East / Africa

4%

+9

Canada

3%

Even

+3

India

2%

+2

+5

HABIT BURGER & GRILL DIVISION

•Habit Burger & Grill Division opened 1 gross new restaurant.

•Habit Burger & Grill Division system sales declined 1% with same-store sales declining 4%.

OTHER ITEMS

•See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Special Items by financial statement line item including the impact of Special Items on General and administrative expenses.

•Disclosures pertaining to outstanding debt in our Restricted Group capital structure will be provided at the time of the filing of the second-quarter Form 10-Q.

LONG-TERM GROWTH ALGORITHM

•The Company targets the following long-term financial performance metrics, first announced in 2022, that it believes it can achieve over an extended period of time, on average:

•5% Unit Growth

•7% System Sales Growth, excluding F/X and 53rd week; and

•At least 8% Core Operating Profit Growth, excluding F/X and 53rd week3

1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets.

3At this time, we are unable to forecast any Special Items or any impact from changes in F/X rates, and therefore cannot provide an estimate of Operating Profit Growth on a GAAP basis.

4

CONFERENCE CALL

Yum! Brands, Inc. will host a conference call to review the company's financial performance and strategies at 8:15 a.m. Eastern Time August 5, 2025. The number is 404/975-4839 for U.S. callers, 833/950-0062 for Canada callers, and +1/404-975-4839 for international callers, conference ID 362231.

The call will be available for playback beginning at 10:00 a.m. Eastern Time August 5, 2025 through August 12, 2025. To access the playback, dial 866/813-9403 in the U.S., 226/828-7578 in Canada, and +1/929-458-6194 internationally, conference ID 252965.

The webcast and the playback can be accessed by visiting Yum! Brands' website, investors.yum.com/events-and-presentations and selecting “Q2 2025 Yum! Brands, Inc. Earnings Call.”

ADDITIONAL INFORMATION ONLINE

Quarter-end dates for each division, restaurant count details, definitions of terms and Restricted Group financial information are available at investors.yum.com. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures are included in our Condensed Consolidated Summary of Results.

FORWARD-LOOKING STATEMENTS

This announcement may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” “belief,” “plan,” “estimate,” “target,” “predict,” “likely,” “seek,” “project,” “model,” “ongoing,” “will,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections, our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances.

Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance or capital structure of Yum! Brands, will prove to be correct or that any of our expectations, estimates or projections will be achieved.

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: food safety and food- or beverage-borne illness concerns; adverse impacts of health epidemics, deterioration in public health conditions or the occurrence of other catastrophic or unforeseen events; the success and financial stability of our concepts’ franchisees, particularly in light of challenging macroeconomic conditions; the success of our development strategy; anticipated benefits from past or potential future acquisitions, investments, other strategic transactions or initiatives, or our portfolio business model; our significant exposure to the Chinese market; our global operations and related exposure to geopolitical instability, including as a result of the Middle East conflict as well as the expansion or threatened expansion of restrictive trade policies which could also impact sentiment for U.S. brands; foreign currency risks and foreign exchange controls; our ability to protect the integrity or availability of IT systems or the security of confidential information and other cybersecurity risks; compliance with data privacy and data protection legal requirements and reporting obligations; our ability to successfully and securely implement technology initiatives, including utilization of artificial intelligence; our increasing dependence on digital commerce platforms; the impact of social media; our ability to protect our trademarks or other intellectual property; shortages or interruptions in the availability and the delivery of food, equipment and other supplies; the loss of key personnel or failure to successfully transition senior management, labor shortages and increased labor costs, including as a result of state and local legislation related to wages and working conditions; changes in food prices and other operating costs; our corporate reputation, the value and perception of our brands and changes in consumer preferences such as wellness trends; evolving expectations and requirements with respect to social and environmental sustainability matters; adverse effects of severe weather and climate change; pending or future litigation and legal claims or proceedings; changes in, or noncompliance with, legal requirements; tax matters, including changes in tax rates or laws, impositions of new taxes, tax implications of our restructurings, or disagreements with taxing authorities; changes in consumer discretionary spending and macroeconomic conditions, including inflationary pressures and elevated interest rates; competition within the retail food industry; and risks relating to our level of indebtedness.

In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this announcement are only made as of the date of this announcement and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions “Risk Factors” and “Forward-Looking Statements” in our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q) for additional detail about factors that could affect our financial and other results.

Yum! Brands, Inc., based in Louisville, Kentucky, and its subsidiaries franchise or operate a system of over 61,000 restaurants in more than 155 countries and territories under the company’s concepts – KFC, Taco Bell, Pizza Hut and Habit Burger & Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-inspired food and pizza categories, respectively. Habit Burger & Grill is a fast casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2024, Yum! was named to the Dow Jones Sustainability Index North America and 3BL’s list of 100 Best Corporate Citizens. In 2025, the Company was recognized among TIME magazine’s list of Best Companies for Future Leaders.

In addition, KFC, Taco Bell and Pizza Hut led Entrepreneur's Top Global Franchises 2024 list and were ranked in the first 25 of Entrepreneur’s 2025 Franchise 500, with Taco Bell securing the No. 1 spot in North America for the fifth consecutive year.

Analysts are invited to contact:

Members of the media are invited to contact:

5

YUM! Brands, Inc.

Condensed Consolidated Summary of Results

(amounts in millions, except per share amounts)

(unaudited)

Quarter ended

% Change

Year to date

% Change

B/(W)

B/(W)

Revenues

Company sales

$

$

$

$

Franchise and property revenues

6

5

Franchise contributions for advertising and other services

6

7

Total revenues

Costs and Expenses, Net

Company restaurant expenses

General and administrative expenses

(8)

(6)

Franchise and property expenses

Franchise advertising and other services expense

(7)

(7)

Refranchising (gain) loss

Other (income) expense

(7)

(5)

NM

(6)

NM

Total costs and expenses, net

Operating Profit

2

4

Investment (income) expense, net

—

—

NM

(1)

NM

Other pension (income) expense

(1)

(1)

(1)

(3)

Interest expense, net

(1)

(2)

Income before income taxes

3

7

Income tax provision

(4)

Net Income

$

$

2

$

$

(8)

Basic EPS

EPS

$

$

3

$

$

(7)

Average shares outstanding

1

1

Diluted EPS

EPS

$

$

4

$

$

(6)

Average shares outstanding

2

1

Dividends declared per common share

$

$

$

$

See accompanying notes.

6

YUM! Brands, Inc.

KFC DIVISION Operating Results

(amounts in millions)

(unaudited)

Quarter ended

% Change

Year to date

% Change

B/(W)

B/(W)

Company sales

$

$

$

$

Franchise and property revenues

8

5

Franchise contributions for advertising and other services

Total revenues

Company restaurant expenses

General and administrative expenses

(2)

Even

Franchise and property expenses

9

Franchise advertising and other services expense

Other (income) expense

—

(1)

NM

—

(3)

NM

Total costs and expenses, net

Operating Profit

$

$

9

$

$

8

Company restaurant margin %1

%

%

%

%

Operating margin

%

%

%

%

See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.

7

YUM! Brands, Inc.

TACO BELL DIVISION Operating Results

(amounts in millions)

(unaudited)

Quarter ended

% Change

Year to date

% Change

B/(W)

B/(W)

Company sales

$

$

7

$

$

8

Franchise and property revenues

6

9

Franchise contributions for advertising and other services

7

8

Total revenues

7

8

Company restaurant expenses

(9)

(9)

General and administrative expenses

(6)

(2)

Franchise and property expenses

7

8

Franchise advertising and other services expense

(8)

(7)

Other (income) expense

—

(1)

NM

—

(1)

NM

Total costs and expenses, net

(8)

(7)

Operating Profit

$

$

5

$

$

Company restaurant margin %1

%

%

%

%

Operating margin

%

%

%

%

See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.

8

YUM! Brands, Inc.

PIZZA HUT DIVISION Operating Results

(amounts in millions)

(unaudited)

Quarter ended

% Change

Year to date

% Change

B/(W)

B/(W)

Company sales

$

7

$

2

$

$

4

Franchise and property revenues

(1)

(2)

Franchise contributions for advertising and other services

(4)

(4)

Total revenues

Even

(1)

Company restaurant expenses

7

2

4

General and administrative expenses

(6)

(6)

Franchise and property expenses

5

Franchise advertising and other services expense

2

1

Other (income) expense

(3)

(3)

NM

(5)

(7)

NM

Total costs and expenses, net

(9)

Operating Profit

$

$

$

$

Company restaurant margin %1

%

%

%

%

Operating margin

%

%

%

%

See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.

9

YUM! Brands, Inc.

Condensed Consolidated Balance Sheets

(amounts in millions)

(unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

$

Prepaid expenses and other current assets

Total Current Assets

Property, plant and equipment, net of accumulated depreciation of $1,456 in 2025

Goodwill

Intangible assets, net

Other assets

Deferred income taxes

Total Assets

$

$

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current Liabilities

Accounts payable and other current liabilities

$

$

Income taxes payable

Short-term borrowings

Total Current Liabilities

Long-term debt

Other liabilities and deferred credits

Total Liabilities

Shareholders' Deficit

Common Stock, no par value, 750 shares authorized; 278 shares issued in 2025 and 279 shares issued in 2024

—

—

Accumulated deficit

Accumulated other comprehensive loss

Total Shareholders' Deficit

Total Liabilities and Shareholders' Deficit

$

$

See accompanying notes.

YUM! Brands, Inc.

Condensed Consolidated Statements of Cash Flows

(amounts in millions)

(unaudited)

Year to date

Cash Flows - Operating Activities

Net Income

$

$

Depreciation and amortization

Refranchising (gain) loss

Investment (income) expense, net

(1)

Deferred income taxes

Share-based compensation expense

Changes in accounts and notes receivable

Changes in prepaid expenses and other current assets

Changes in accounts payable and other current liabilities

Changes in income taxes payable

Other, net

Net Cash Provided by Operating Activities

Cash Flows - Investing Activities

Capital spending

Proceeds from sale of Devyani Investment

—

Acquisition of KFC U.K. and Ireland restaurants

—

Other restaurant acquisitions

—

Proceeds from refranchising of restaurants

Maturities (purchases) of Short term investments, net

Other, net

2

Net Cash Used in Investing Activities

Cash Flows - Financing Activities

Proceeds from long-term debt

—

Repayments of long-term debt

Revolving credit facilities, three months or less, net

Short-term borrowings by original maturity

More than three months - proceeds

—

More than three months - payments

—

Three months or less, net

—

—

Repurchase shares of Common Stock

Dividends paid on Common Stock

Other, net

Net Cash Used in Financing Activities

Effect of Exchange Rate on Cash and Cash Equivalents

(6)

Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash and Restricted Cash

Equivalents

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - Beginning of Period

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - End of Period

$

$

See accompanying notes.

Reconciliation of Non-GAAP Measurements to GAAP Results

(amounts in millions, except per share amounts)

(unaudited)

In addition to the results provided in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP"), the Company provides the following non-GAAP measurements.

•Diluted Earnings Per Share ("EPS") excluding Special Items (as defined below);

•Effective Tax Rate excluding Special Items;

•Core Operating Profit. Core Operating Profit excludes Special Items and foreign currency translation (“F/X”) and we use Core Operating Profit for the purposes of evaluating performance internally;

•Net Income, excluding Special Items;

•Company restaurant profit and Company restaurant margin as a percentage of sales (as defined below).

These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measurements provide additional information to investors to facilitate the comparison of past and present operations.

Special Items are not included in any of our Division segment results as the Company does not believe they are indicative of our ongoing operations due to their size and/or nature. Our chief operating decision maker does not consider the impact of Special Items when assessing segment performance. The Special Items are described in (a) - (e) in the accompanying notes.

Company restaurant profit is defined as Company sales less Company restaurant expenses, both of which appear on the face of our Condensed Consolidated Statements of Income. Company restaurant expenses include those expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, cost of restaurant-level labor, rent, depreciation and amortization of restaurant-level assets and advertising expenses incurred by and on behalf of that Company restaurant. Company restaurant margin as a percentage of sales ("Company restaurant margin %") is defined as Company restaurant profit divided by Company sales. We use Company restaurant profit for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe Company restaurant profit provides useful information to investors as to the profitability of our Company-owned restaurants.

In calculating Company restaurant profit, the Company excludes revenues and expenses directly associated with our franchise operations as well as non-restaurant-level costs included in General and administrative expenses, some of which may support Company-owned restaurant operations. The Company also excludes restaurant-level asset impairment and closures expenses, which have historically not been significant, from the determination of Company restaurant profit as such expenses are not believed to be indicative of ongoing operations. Further, while we generally include depreciation and amortization of restaurant-level assets within Divisional Company restaurant expenses used to derive Divisional Company restaurant profit, we record amortization of reacquired franchise rights arising from acquisition accounting within Corporate and Unallocated Company restaurant expenses as such amortization is not believed to be indicative of ongoing Divisional results as well as to enhance the comparability of acquired stores' margins with those of existing restaurants for which reacquired franchise rights are not applicable. Company restaurant profit and Company restaurant margin % as presented may not be comparable to other similarly titled measures of other companies in the industry.

Certain non-GAAP measurements are presented excluding the impact of F/X. These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

Quarter ended

Year to date

Reconciliation of GAAP Operating Profit to Core Operating Profit

Consolidated

GAAP Operating Profit

$

$

$

$

Detail of Special Items:

Loss associated with market-wide refranchisings(a)

—

1

—

4

Charges associated with Resource Optimization(b)

Charges associated with Brand HQ Consolidation (c)

—

—

German acquisition and Turkey termination-related costs (d)

5

—

7

—

Special Items Expense - Operating Profit

Negative (Positive) Foreign Currency Impact on Division Operating Profit

(4)

N/A

7

N/A

Core Operating Profit

$

$

$

$

Special Items as shown above were recorded to the financial statement line items identified below.

Quarter ended

Year to date

Condensed Consolidated Summary of Results Line Item

Decrease in Franchise and property revenues

$

—

$

—

$

1

$

—

Increase in General and administrative expenses

Increase in Refranchising (gain) loss

—

1

—

4

Increase in Other income

—

—

(2)

—

Special Items Expense - Operating Profit

$

$

$

$

KFC Division

GAAP Operating Profit

$

$

$

$

Negative (Positive) Foreign Currency Impact

(4)

N/A

5

N/A

Core Operating Profit

$

$

$

$

Taco Bell Division

GAAP Operating Profit

$

$

$

$

Negative (Positive) Foreign Currency Impact

—

N/A

—

N/A

Core Operating Profit

$

$

$

$

Pizza Hut Division

GAAP Operating Profit

$

$

$

$

Negative (Positive) Foreign Currency Impact

—

N/A

1

N/A

Core Operating Profit

$

$

$

$

Habit Burger & Grill Division

GAAP Operating Profit (Loss)

$

3

$

2

$

2

$

(3)

Negative (Positive) Foreign Currency Impact

—

N/A

—

N/A

Core Operating Profit (Loss)

$

3

$

2

$

2

$

(3)

Reconciliation of GAAP Net Income to Net Income excluding Special Items

GAAP Net Income

$

$

$

$

Special Items Expense - Operating Profit

Special Items Tax Expense (Benefit)(e)

3

(7)

Net Income excluding Special Items

$

$

$

$

Reconciliation of Diluted EPS to Diluted EPS excluding Special Items

Diluted EPS

$

$

$

$

Less Special Items Diluted EPS

Diluted EPS excluding Special Items

$

$

$

$

Reconciliation of GAAP Effective Tax Rate to Effective Tax Rate excluding Special Items

GAAP Effective Tax Rate

%

%

%

%

Impact on Tax Rate as a result of Special Items

%

—

%

%

%

Effective Tax Rate excluding Special Items

%

%

%

%

Reconciliation of GAAP Operating Profit to Company Restaurant Profit

KFC Division

Taco Bell Division

Pizza Hut Division

Habit Burger & Grill Division

Corporate and Unallocated

Consolidated

GAAP Operating Profit (Loss)

$

$

$

$

3

$

$

Less:

Franchise and property revenues

3

—

Franchise contributions for advertising and other services

1

—

Add:

General and administrative expenses

Franchise and property expenses

7

1

—

Franchise advertising and other services expense

1

—

Refranchising (gain) loss

—

—

—

—

Other (income) expense

—

—

(3)

—

(4)

(7)

Company restaurant profit (loss)

$

$

$

—

$

$

(4)

$

Company sales

$

$

$

7

$

$

—

$

Company restaurant margin %

%

%

%

%

N/A

%

KFC Division

Taco Bell Division

Pizza Hut Division

Habit Burger & Grill Division

Corporate and Unallocated

Consolidated

GAAP Operating Profit (Loss)

$

$

$

$

2

$

$

Less:

Franchise and property revenues

2

—

Franchise contributions for advertising and other services

—

—

Add:

General and administrative expenses

Franchise and property expenses

9

8

5

1

—

Franchise advertising and other services expense

—

—

Refranchising (gain) loss

—

—

—

—

Other (income) expense

(1)

(1)

(3)

—

—

(5)

Company restaurant profit (loss)

$

$

$

—

$

$

(1)

$

Company sales

$

$

$

2

$

$

—

$

Company restaurant margin %

%

%

%

%

N/A

%

KFC Division

Taco Bell Division

Pizza Hut Division

Habit Burger & Grill Division

Corporate and Unallocated

Consolidated

GAAP Operating Profit (Loss)

$

$

$

$

2

$

$

Less:

Franchise and property revenues

5

(1)

Franchise contributions for advertising and other services

1

—

Add:

General and administrative expenses

Franchise and property expenses

2

—

Franchise advertising and other services expense

1

—

Refranchising (gain) loss

—

—

—

—

Other (income) expense

—

—

(5)

—

Company restaurant profit (loss)

$

$

$

(1)

$

$

(7)

$

Company sales

$

$

$

$

$

—

$

Company restaurant margin %

%

%

%

%

N/A

%

KFC Division

Taco Bell Division

Pizza Hut Division

Habit Burger & Grill Division

Corporate and Unallocated

Consolidated

GAAP Operating Profit (Loss)

$

$

$

$

(3)

$

$

Less:

Franchise and property revenues

4

—

Franchise contributions for advertising and other services

1

—

Add:

General and administrative expenses

Franchise and property expenses

2

—

Franchise advertising and other services expense

1

—

Refranchising (gain) loss

—

—

—

—

Other (income) expense

(3)

(1)

(7)

—

5

(6)

Company restaurant profit (loss)

$

$

$

—

$

$

(1)

$

Company sales

$

$

$

4

$

$

—

$

Company restaurant margin %

%

%

%

%

N/A

%

YUM! Brands, Inc.

Segment Results

(amounts in millions)

(unaudited)

KFC Division

Taco Bell Division

Pizza Hut Division

Habit Burger & Grill Division

Corporate and Unallocated

Consolidated

Total revenues

$

$

$

$

$

—

$

Company restaurant expenses

7

4