2. Definitions
Capital Spending — Includes capital spending, excludes acquisitions of restaurants from franchisees.
China Division — Includes mainland China, Thailand and KFC Taiwan businesses.
General & Administrative (G&A) Costs — Include general & administrative costs and franchise and license expense.
International Division — Countries & territories outside the U.S., excluding China Division, but including Hawaii.
Local Currency — Represents the percentage change excluding the impact of foreign currency translation. These amounts
are calculated by translating current-year results at prior-year average exchange rates. We believe elimination of the
foreign currency translation impact provides better year-to-year comparability of sales trends without the distortion of
foreign currency fluctuations.
Net Unit Growth – Growth in system restaurants excluding the impact of acquisitions.
Operating Margin — Represents operating profit dollars as a percentage of revenue dollars.
Reported Currency — Represents the percentage change including the impact of foreign currency translation. All
financial numbers in thi d
fi il b i this document are in reported currency unless otherwise noted.
t i td l th i td
New Restaurant Openings — Include unconsolidated affiliates (joint ventures), company-owned and franchise restaurants
and exclude license restaurants.
3. Definitions
Special Items — Include the GAAP income statement captions of Wrench litigation, AmeriServe and other charges
(credits) from 1998-2005 and the cumulative effect of accounting change in 2003, net of tax. For the years 2008 through
2010, special items also include the gain on the sale of our minority interest in our Japan unconsolidated affiliate, U.S.
refranchising (gain)/loss, charges relating to U.S. General and Administrative productivity initiatives and realignment of
resources, as well as investments in our U.S. Brands.
(The Company uses earnings before special items as a key performance measure of results of operations for purposes of
evaluating performance internally. This non-GAAP measurement is not intended to replace the presentation of our
financial results in accordance with GAAP. Rather, the company believes EPS before special items provides additional
information to investors to facilitate the comparison of past and present operations, excluding items that the Company
does not believe are indicative of our ongoing operations due to their size and/or nature.)
Same-Store-Sales Growth — The estimated growth in sales of all restaurants that have been open one year or more
regardless of ownership including unconsolidated affiliates (joint ventures), company-owned, franchise and license
restaurants.
System R t
St Restaurants — I l d unconsolidated affiliates (joint ventures), company-owned, franchise and license
t Include lid t d ffili t (j i t t ) df hi d li
restaurants.
System-Sales Growth includes the results of all restaurants regardless of ownership including unconsolidated affiliates
(joint ventures), company-owned, franchise and license restaurants. Sales of unconsolidated affiliates (joint ventures),
franchise and license restaurants generate franchise and license fees for the company (typically at a rate of 4% to 6% of
sales). Unconsolidated affiliates (joint ventures), franchise and license restaurant sales are not included in company sales
we present on the Condensed Consolidated Statements of Income; however, the franchise fees previously defined are
included in the company’s revenues. We believe system-sales growth is useful to investors as a significant indicator of the
overall strength of our business as it incorporates all our revenue drivers, company and franchise same-store sales as well
as new-restaurant development.
Total Units – Include unconsolidated affiliates (joint ventures), company-owned, franchise, and license restaurants.
Traditional Restaurants — Includes unconsolidated affiliate (joint-venture), company-owned and franchise restaurants, but
excludes license restaurants unless noted. (Note: all units referenced in the YRI section are Traditional Restaurants)
4. Two Global Brands
YRI System Restaurants By Geography
Asia
36% Americas
22%
4,800+
Europe
6,900+
22%
Australia/
New Zealand
Taco Bell/
9%
Long John Silver’s/
Silver s/
Middle East/
A&W
South Africa
500+
11%
Note: 2007 system restaurants.
5. Highly Diversified Growth Business
YRI Overview
’02 – ’07
02 07
# of % of System System Sales
Countries Sales CAGR
Middle East/Africa 24 12% 24%
Europe 30 31% 15%
Asia/Australia
/ 21 38% 8%
The Americas 37 19% 8%
Note: Includes foreign-currency exchange impact
6. Taco Bell – Key Driver of
U.S. Performance
U.S. Operating Profit
2008 F
1%
Long John Silver’s
8%
&
KFC
A&W
59%
Taco
Bell
32%
Pizza Hut
7. New Restaurant Openings
WORLDWIDE 1,785
1,707
1,600+
,
1,554
1,515
1,489 1,498 1,497 1,450
1,438
1,264
1,078
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Net Unit
– +1 +1 – +1 +1 +1 +2 +1 +2 +2 +2
Growth %
Note: Forecast rounded to nearest five.
8. New Restaurant Openings
CHINA DIVISION
550
506 500+
409 396
357
302 297
266
167
138 128
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Net Unit
+22 +15 +18 +12 +25 +17 +18 +19 +15 +17 +16 +12
Growth %
Note: Forecast rounded to nearest five.
9. New Restaurant Openings
YRI DIVISION
900
895
852
811
785
780
775
762 749
720
549
527
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Net Unit
– +3 +5 +5 +4 +3 +3 +4 +3 +4 +4 +4
Growth %
Note: Forecast rounded to nearest five.
10. New Restaurant Openings
UNITED STATES
587
509
448 447
413
389
373 365
349 340
334
200+
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Net Unit
(1) (1) (1) (2) (2) (1) (1) (1) (2) (1) (1) -
Growth %
Note: Forecast rounded to nearest five.
15. Restaurant Margin
WORLDWIDE
% of Company Net Sales
16.0
15.4 15.1 15.2
14.8 14.5
14.8 14.6 14.5
14.0
13.5 13.5
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
* Beginning in 2002 with the adoption of SFAS 142, goodwill amortization is no longer reflected in margin
Note: Forecast rounded to nearest 50 basis points.
16. Restaurant Margin
CHINA DIVISION
% of Company Net Sales
20.4 20.1
20.3
19.8
19.3
18.0 18.0
17.8 17 4
17.4 17.4
17 4
14.9 14.9
’98 ’99 ’00 ’01 ’02* ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
* Beginning in 2002 with the adoption of SFAS 142, goodwill amortization is no longer reflected in margin
Note: Forecast rounded to nearest 50 basis points.
17. Restaurant Margin
YRI DIVISION
% of Company Net Sales
14.3 14.2
13.7
13.4
13.0 13.0
12.7
12 7
12.1 12.2 12.3
11.0 11.0+
’98 ’99 ’00 ’01 ’02* ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
* Beginning in 2002 with the adoption of SFAS 142, goodwill amortization is no longer reflected in margin
Note: Forecast rounded to nearest 50 basis points.
18. Restaurant Margin
UNITED STATES
% of Company Net Sales
16.0
15.7
15.2 15.2
14.6 14.6
13.8 13.8
13.6
13.3
13.0
12.0
’98 ’99 ’00 ’01 ’02* ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
* Beginning in 2002 with the adoption of SFAS 142, goodwill amortization is no longer reflected in margin
Note: Forecast rounded to nearest 50 basis points.
21. Operating Profit
YRI DIVISION
Operating Profit
$530
($ million)
$500
$480
$407
$372
$337
$280
$243 $242 $241
$205
$186
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Forecast rounded to nearest five. 2009 is negatively impacted due to the reallocation of $5 million of unallocated G&A reclassified
as YRI G&A. 2009 is also negatively impacted by foreign currency translation of about $80 million.
22. Operating Profit
UNITED STATES
Operating Profit
($ million)
$802 $812 $777
$808
$760 $763
$739
$728 $735
$721
$695 $685
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Forecast rounded to nearest five. 2009 is negatively impacted due to the reallocation of $45 million of unallocated G&A reclassified
as U.S. G&A.
23. Top 5 Currencies Impact On
Operating Profit
2007 Operating Profit ($MM)
Chinese Yuan ~350
~100
British Pound
Australian Dollar ~75
75
Euro
E ~50
50
Canadian Dollar ~50
Note: Operating profit rounded to nearest $25MM
24. Operating Profit Margin
WORLDWIDE
% of Revenue
15.9
13.5
13.3 13.2 13.0 13.0
12.8
12 8 12.6 12 8
12.8
12.3
12.1 12.1
’98 ’99 ’00 ’01 ’02* ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Forecast rounded to nearest 50 basis points. Beginning in 2002 with the adoption of SFAS 142, goodwill amortization is no longer
reflected in margin.
25. Operating Profit Margin
YRI DIVISION
% of Revenue
17.5 17.6 17.5
17.0
15.8
15.7 15.6
15.4
5
15.3
14.5
11.9
10.5
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Forecast rounded to nearest 50 basis points. 2009 was negatively impacted due to the reallocation of $5 million of
unallocated G&A reclassified as YRI G&A.
26. Operating Profit Margin
UNITED STATES
% of Revenue
15.5
15.0
14.4
14.1 14.4 14.4 14.2
13.6 13.5
13.5
13 5
12.8
11.2
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Forecast rounded to nearest 50 basis points. 2009 is negatively impacted due to reallocation of $45 million of unallocated G&A
reclassified as U.S. G&A.
29. Consistent Double-Digit EPS Growth
+15% +15%
+14%
+13%
13%
+13% +13%
13%
+12%
+10% Target
at least
10%
’02 ’03 ’04 ’05 ’06 ’07 ’08 F ’09 F
Note: Prior to special items. 2005 growth rate is also prior to the impact of expensing stock options.
30. EPS Reconciliation
’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 F
EPS
before
Special Items 0.72 1.03 0.91 0.81 0.91 1.03 1.18 1.27 1.46 1.68 1.89
Special Items (0.01) (0.05) (0.22) — 0.03 (0.02) 0.03 0.01 — — .03
Reported EPS 0.71 0.98 0.69 0.81 0.94 1.01 1.21 1.28 1.46 1.68 1.92
Note: EPS is adjusted for stock splits in 2002 and 2007. Starting in 2005, EPS includes options expense.
The estimated impact of stock option expense on EPS is approximately $0.07 per share for periods subsequent to 2004.
33. Yum! 2009 Capital Plan
($ million)
China YRI U.S. Total
New Company
Restaurants 240 140 75 455
Upgrade 70 55 85 210
Brand Projects 35 40 65 140
SUBTOTAL 345 235 225 805
Maintenance 15 30 50 95
Corp/Other 0 0 0 0
TOTAL 360 265 275 900
34. EBITDA
Note
We do not measure cash flow from operating activities on a
segment basis However, we believe segment EBITDA provides a
basis. However
reasonable approximation of the ongoing cash generated by our
segments prior to interest and income taxes and is thus useful to
management and investors. Operating profit does not reflect
interest expense and income taxes, and on a segment basis, also
does not reflect certain unallocated expenses and other gains and
losses.
36. EBITDA
($ million)
Total YUM ’03 ’04 ’05 ’06 ’07 ’08 F
Operating profit $1,059 $1,155 $1,153 $1,262 $1,357 $1,480
Depreciation & amortization 401 448 469 479 542 530
Impairment 34 41 62 60 43 55
5 Year CAGR
EBITDA $1,494 $1,644 $1,684 $1,801 $1, 942 $2,065 +7%
Reconciliation to Net Income
$1,460 $1,594
Segment operating profit $1,253 $1,319 $1,343
(229) (257)
Unallocated and corporate expenses (179) (204) (246)
6 9
Unallocated other income (expense) (3) (2) 9
24 11
Unallocated refranchising gain (loss) 4 12 43
- -
Wrench litigation (expense) income (42) 14 2
1 -
AmeriServe and other (charges) credits 26 16 2
(154) (166)
Interest expense (173) (129) (127)
(
(284)
) (
(282)
)
Income taxes (
(268)
) (
(286)
) (
(264)
)
Cumulative effect of accounting change (1) - - - -
$824 $909
Net income $617 $740 $762
Continued next slide
Note: Forecast rounded to nearest five
37. EBITDA & Capital Spending
($ million)
’03 ’04 ’05 ’06 ’07
Capital Spending
U.S. $395 $365 $333 $329 $304
International Division 135 121 96 118 189
China Division 111 118 159 165 246
Corporate 22 41 21 2 3
Total $663 $645 $609 $614 $742
U.S. EBITDA after CAPEX
S f C
EBITDA $1,067 $1,061 $1,070 $1,060 $1,009
Capital Spending 395 365 333 329 304
EBITDA after CAPEX $672 $696 $737 $731 $705
YRI EBITDA after CAPEX
EBITDA $379 $455 $489 $537 $654
Capital Spending 135 121 96 118 189
EBITDA after CAPEX $244 $334 $393 $419 $465
Continued on next slide
Note: Forecast rounded to nearest five
38. EBITDA & Capital Spending
($ million)
’03 ’04 ’05 ’06 ’07
China EBITDA after CAPEX
EBITDA $227 $279 $301 $392 $499
Capital Spending 111 118 159 165 246
EBITDA after CAPEX $116 $161 $142 $227 $253
YUM EBITDA after CAPEX
EBITDA $1,494 $1,644 $1,684 $1,801 $1,942
Capital Spending 663 645 609 614 742
EBITDA after CAPEX $831 $999 $1,075
$1 075 $1,187
$1 187 $1,200
$1 200
Note: Forecast rounded to nearest five
39. Yum! Return on Invested Capital (ROIC)
($ million, except percentages)
’03 ’04 ’054 ’06 ’07
Operating Profit 1,059 1,155 1,153 1,262 1,357
Closure & Impairment Charges/(Credits) 40 38 62 59 35
Refranchising Net Loss/(Gain) (4) (16) (43) (24) (11)
Implicit Lease Interest Expense 139 155 164 196 227
External Interest Income 12 16 20 18 30
Total ROIC Income Pretax 1,262 1,322 1,356 1,511
1,638
ROIC Income after Tax 880 957 1,007 1,123
1,252
Net Asset Base1,5 3,186 3,337 3,309 3,657 3,812
PV of Operating Leases 1,538 1,570 1,706 2,209 2,333
Closure & Impairment Charges/(Credits) Since 19972 483 515 567 611 635
Total 5,207 5,422 5,582 6,477 6,780
ROIC Net Asset Base3 4,967 5,315 5,502 6,029 6,628
ROIC 17.7% 18.0% 18.3% 18.6% 18.9%
1T
Total
l assets less current liabilities (excluding debt/cap leases) and other liabilities and deferred credits
l li bili i ( l di d b / l ) d h li bili i dd f d di
2Closure and impairment charges adjusted down for impairment on refranchised stores.
3Average net asset base for current and prior year
4 Includes impact of stock option expense under SFAS 123R, “Share-Based Payment” and 53rd Week
5 Asset balances adjusted for excess cash to reflect average operating cash needs
