yum monday master file_ webcast

Today’s Agenda

Welcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tim Jerzyk

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . David Novak

China Division Growth Strategy . . . . . . . . . . . . . Sam Su

BREAK

Division “Trade Show” . . . . . . . . . . . . . . . . . . . . . Division & Brand Senior Management

Tour of Muhammad Ali Center

This presentation will include forward-lookingstatements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information in the presentation related to projections or other forward-looking statements may be relied on subject to the safe harbor statement posted on our Web site: www.yum.com.

This presentation will include forward-lookingstatements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information in the presentation related to projections or other forward-looking statements may be relied on subject to the safe harbor statement posted on safe harbor statement posted on our Web site: www.yum.com.our Web site: www.yum.com.

Information herein is as of 4/22/08

Power of Yum!

GLOBAL PORTFOLIO

GLOBAL GROWTH

GLOBAL CASH GENERATION

Consistent Double-Digit EPS Growth

Note: Prior to special items. 2005 growth rate is also prior to the impact of expensing stock options.

+13% +13%

+15%

+13%+14%

+15%

+11%

’02 ’03 ’04 ’05 ’06 ’07 ’08 F

Targetat least

10%

Targetat least

10%

Significant Share Buybacks

569

1,056 983

1,410

’04 ’05 ’06 ’07

611597

564

541

’04 ’05 ’06 ’07

Share Buybacks($ million)

Average Diluted Shares(million)

12%reduction

AvgPrice*

$20 $25 $25 $34

*Rounded and split adjusted

Adding Shareholder Value

Driving Shareholder Value

Same-Store-Sales Growth

New Unit Growth

High Return on Invested Capital

Same-Store-Sales Growth

• More Balanced Options

• New Dayparts

• Everyday Value

• Contemporary Beverages & Destination Desserts

• New Proteins

• Contemporary Assets

• More Balanced Options

• New Dayparts

• Everyday Value

• Contemporary Beverages & Destination Desserts

• New Proteins

• Contemporary Assets

Brand Vision for Sales LayersBrand Vision for Sales Layers

Leveraging 35,000 Restaurant AssetsLeveraging 35,000 Restaurant Assets

Asset Leverage Opportunity

2.0

1.1

1.9

1.01.5

0.8

Top 10%Company

System Top 10%Company

System Top 10%Company

System

2007 Average Unit Volume($ million)

2.0

System

302 297

357

409 396

506

’02 ’03 ’04 ’05 ’06 ’07

High-Return Unit Growth – China

China DivisionNew Restaurants

Largest Nationwide Development Capability

Equity Driven

StrategicAdvantage

’02 ’03 ’04 ’05 ’06 ’07

High-Return Unit Growth – YRIYRI Division

Traditional New Restaurants

749811

720780 785

852

94%

6%

700+ Franchisees . . . across 110+ Markets

Company

Franchise Driven

StrategicAdvantage

Increasing Return on Invested Capital

• Extensive Equity Investment in Mainland China

• Broad-based YRI Franchise Growth

• Substantially Increased U.S. Franchise Ownership

• Increased Asset Leverage through Sales Layers

18% ROIC

People Capability First . . .satisfied customers and profitability follow

Our PassionOur PassionCustomer Mania . . .

put a YUM on customers’ faces around the world

How We GrowHow We Grow

How We LeadHow We Lead(with intentionality)

1. Step Change Thinkers2. Know How Builders

3. Action Drivers4. People Growers

Our Formula for SuccessOur Formula for Success

The Dynasty ModelOur GoalOur Goal

Be the Best in the World at Building Great Brands and Running Great Restaurants!

Dramatically Improve U.S. Brand

Positions, Consistencyand Returns

Dramatically Improve U.S. Brand

Positions, Consistencyand Returns

Drive Aggressive,International Expansionand Build Strong Brands

Everywhere

Drive Aggressive,International Expansionand Build Strong Brands

Everywhere

BuildLeading Brands in

China in Every Significant Category

BuildLeading Brands in

China in Every Significant Category

Drive Industry-Leading, Long-Term

Shareholder andFranchisee Value

Drive Industry-Leading, Long-Term

Shareholder andFranchisee Value

A Winning Culture

how we win together

how we win together

(hwwt)2(hwwt)2

believe in all peoplebelieve in all people

we are customer maniacswe are customer maniacs

go for breakthroughgo for breakthrough

build know howbuild know how

take the hill teamworktake the hill teamwork

recognize! recognize! recognize!recognize! recognize! recognize!

16

Yum!: A Defining Global Company

People Focused Culture: Where everyone makes a difference

Breakthrough Results with Breakthrough Innovation

Giving to Others: World Food Program

Build Leading Brands Across China


Dramatically ImproveU.S. Brand Positions,

Consistency and Returns

Dramatically ImproveU.S. Brand Positions,

Consistency and Returns

Drive Aggressive International

Expansion and BuildStrong Brands

Everywhere

Drive Aggressive International

Expansion and BuildStrong Brands

Everywhere


in Every Significant Category


in Every Significant Category

Drive Industry-Leading, Long-Term Shareholder and Franchisee

Value

Drive Industry-Leading, Long-Term Shareholder and Franchisee

Value

YUM’s #1 Growth Strategy

Other NewConcepts

Other NewConcepts

WesternCasualDining

WesternCasualDining

Building a Portfolio of Category-Leading Brands

Home Delivery

ChineseQSR

East DawningEast Dawning

Western QSR

??

Strong Profit Growth in a Scale Business

$120

$205

$290

$375

’02 ’04 ’06 ’07

China Division($ million)

26%+5-Year CAGR

26%+26%+55--Year CAGRYear CAGR

Yum! China

HugeRestaurantOpportunity


Portfolio of Brandsto Capture Opportunity


Big InvestmentsIn Support Capability


PopulationUrban 500 million

Total 1.3 billion

A Huge Opportunity

China

— Best growth market of 21st Century —

U.S. Total Population

300 million

Biggest Growth Opportunity for Restaurant Industry in 21st Century

Double-digit GDP/personal income growth last 4 years

Over 18 million people enter cities each year

Restaurant chain market share < 3%U.S. Chain Brands = 60% of U.S. QSR market

High purchase intent for Western brands

Consumer demand for quality growing sharply

“To become the best restaurant company

not only in China but the world”

Yum Restaurants China

Team Mission Statement

At Pepsi spin-off (October 1997)

Big Opportunity Deserves a Big Goal

Yum! China







Building Leading Brands in Multiple Key Categories

CasualDining

CasualDiningQSR Delivery QSR

Chinese


Restaurant Categories

1987 1990 2001 20051987 1990 2001 2005

YUM! China

KFC the Leader in QSR

“Life is tastier with KFC”AUV = $1.3 million

#1 QSR

KFC Well Positioned to Capture Huge Opportunity

The leading QSR brand by wide margin

In over 450 cities

Reach & frequency at all-time high

Yet plenty of room for growth

As well positioned in China as McDonald’s was in the U.S.

Strong unit economics enable expansion

KFC’s Positioning: Go Beyond Traditional QSR

Core QSR strengths QSCV

Focus on few products to generate volume

Focus on product consistency (industrialize)

Value drivers (“up size”)

Traditional QSR

Maintain the core (QSCV)

Offer variety

Focus on product taste

Offer balanced choices

Encourage balanced meals & regular exercise

Go Beyond the Traditional

Eat a lot of same product frequently

Educate consumer on healthy life style

61*Food expert

67*Chicken expert

65*Interesting new products

66*Food variety

73*Good taste

KFCTop 2 box%

Data source: BIT March 2008 *Significant difference versus nearest competition,N=1900 in 47 cities 95 confidence level

KFC Leads in Major Food-Related Measures…

65*The leading QSR brand in China

71*63*61*

A brand I can trustThe QSR brand I like most Deeply rooted in China

KFCTop 2 box%

… and in Many Brand Imagery Attributes

Data source: BIT March 2008 *Significant difference versus nearest competition,N=1900 in 47 cities 95 confidence level

Building a Big Brand at KFC

Community Involvement

In-Store Experience

Menu designed for Broad Appeal

Rooted in Chinaintegrated into their life

KFC Menu Design Strategy

The chicken expert, but not chicken only

Different cooking platform to enhance variety

Meaningful side items to support balanced choices

Variety for different day parts, including breakfast

Products adapted to local tastes

Innovation Key to KFC’s Menu in China. . .

KFC Innovation in Chicken, Other Proteins

ChickenSandwiches Fish Series

KFC Innovation in Snacks, Soups & Salads

SnackVariety

Soups, Salads

KFC Innovation in Desserts, Beverages

Desserts Hot & Cold Drinks

Beyond Menu, KFC’s In-Store Experience Second to None

Passionate crew brings Customer Mania to life

Up-to-date interior design

Dedicated hostess program in every store

Chicky program, a big hit with KidsBirthday parties

Kids fun club - educational content

Community Involvement That’s Deeply Rooted

Hostess as “community ambassador”

Community events / Festival celebration

Chicky program

KFC National Youth 3-on-3 Basketball Tournament

Largest grass-roots sports program in China history

Encourage healthy lifestyle

Charity program a critical part of brand building

First Light Foundation

• New sales layers

• Multiple proteins

• Multiple day parts

• Delivery

• New cities

KFC Brand Ready to Grow Even Bigger

Strong Growth for Pizza Hut Casual Dining

95119

155

204

254

351

’02 ’03 ’04 ’05 ’06 '07

Casual Dining Restaurants

Pizza Hut the Clear Category Leader in Casual Dining

Complete casual dining experience

Few Western competitors

In over 80 cities

Developing at rapid pace

Highly profitable business

Proven economics beyond top-tier cities

A Unique Western Casual Dining Brand

For most Chinese, a first experience with western dining

Pizza varieties - Pan, Thin & Crispy, Stuffed Crust

Expertise and innovation well beyond PizzaSautéed Pasta, Risotto

Regional cuisine – from Italy, from other origins

Complete meals -- appetizer, soup, salad, drinks, dessert

A Premium Casual Dining Experience

Escape from the ordinary

Upscale décor package

“5-Star” feel

In-store activities – e.g., country festivals

Fun, special moments

Tea Time afternoon day part

Pizza Hut Home Service an Emerging Growth Brand

Pizza Hut Home Service

First in China to offer pizza delivery

Already a proven business model

Over 50 units today

Entering new cities

Delivery Brand with Everyday Affordability

Functionally focused

Simplifying consumers’ daily routine

New traditional dough

Fast bake time

Non-pizza menu to enhance varieties

Delivery with Differentiated Service

Easy ordering

Well-trained Call Center staff

Online ordering

Delivery time promise

Neat, professional drivers

East Dawning: Our First Foray into Chinese QSR


Bold Intentions to Build the Leading Chinese QSR Brand

East DawningEast Dawning14 units today

Strong SSS growth

Improving AUVs

Inaugural TV launched

A Promising Future

KFC graduate

Higher frequency

Balanced in nature

Moving beyond Shanghai


East Dawning – The Choice of Chinese QSR

Chinese Fast Food Meets KFC’s Standards

East Dawning

Yum! China







Making Bigger Investment in China

Unmatched Support Capabilities

Development

Logistics

Food Safety/Quality

Food Innovation

Manufacturing

Call Center / Online Ordering

Enabling Rapid Growth in Our High-Return

Brands

Unrivaled Development Capability

Today . . . 600+ Development professionals on the ground

Extensive people development programsTechnical know-how and execution

Incentive programs drive superior results

Database of 450+ cities

2,500+ investment decisions in our database

Penetrating Beyond the Big Cities

2005 2006 2007

KFC – % of New Builds by Tier

50 % 48 % 49%Tier 1,2

Tier 3,4,5,6 51%

New Opportunities in Non-Traditional Units

• Today, over 25 Drive-Thru units

• Entering new destinations

– Airports, Bus & Train Stations

Operating Our Own Logistics Since Day One

Distribution Centers: 11

Satellite DC: 5

Processing: 2

Today, A Powerful Advantage

World Class Logistics Infrastructure

Multiple Brands, Three Temperatures (Dry, Chilled, Frozen)

Investing in Logistics to Support Future Growth

World-class distribution system

Support world-class restaurant operation

Food safety, ensure cold temp chain

Network plan for future store, volume growth

Increased efficiency with scale

Food Safety and Quality a Top Priority

Our Food Safety approach cited as strong model for China

Collaborating with government at many levels

Credibility with consumers and regulatory officials

Supplier commitment to our standards growing

As a whole, the industry is moving in the right direction

Food Product Innovation a Core Value for China

Brands focused on developing new sales layers

Multiple categories: Proteins, Snacks, Desserts, Drinks

Launched 80+ new products annually across our brands

Over 170 products in our pipeline at any time

Team understands local palate, unique food culture

Intent to make breakthroughs in big payoff area:Chinese Fast Food

Pizza Dough Commissary Egg Tart Commissary

Targeted support for portfolio of growing brands

Manufacturing When it Makes Sense

Destination Dessert

Call Center, Online Ordering to Strengthen the Brand Experience

Investing in technology, services to make Brands more accessible

Multiple national call centers, across China

Well-trained staff ready to take customer orders

Online ordering for added convenience

Capabilities scalable for multiple brands

Yum! China







Sustainable Competitive Advantages

Entering 3rd decade in Mainland China, first in market

Talented, tenured team… on the ground in Shanghai

Portfolio of category-leading Brands

Top tier Development team (600+ people)

Own major distribution network

Food Innovation, Food Safety systems “best in class”

Targeted manufacturing where it makes sense

Mainland China Market Potential

20,000+ Restaurants20,000+ Restaurants

Q&AQ&AYum! ChinaYum! China

Yum! China Leadership PanelYum! China Leadership Panel

Sam SuSam Su President, Yum! ChinaPresident, Yum! China

Lily HsiehLily Hsieh Chief Financial OfficerChief Financial Officer

Angela Angela LohLoh Chief Marketing OfficerChief Marketing Officer

Joaquin Joaquin PelaezPelaez Chief Support OfficerChief Support Officer

yum monday master file_ webcast

Economy & Finance

growth rate

biggest growth opportunity

strong profit growth

chain brands

restaurant industry

big opportunity

building great brands

drive drive industryleading