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Actionable news in YUM: YUM! BRANDS Inc,

Yum!: Vice President, Investor Relations & Corporate Strategy

The following excerpt is from the company's SEC filing.

Yum! Brands Reports Core Operating Profit Growth of 21% in First Quarter 2016;

Raises Full-Year Core Operating Profit Growth Guidance to 12%

- Yum! Brands, Inc. (NYSE: YUM) today reported results for the first quarter ended March 19, 2016, including EPS of $0.95 excluding Special Items. On a reported basis, EPS was $0.93 and operating profit growth was 12%.

Core operating profit growth and core operating margin growth figures exclude foreign currency translation and Special Items.

FIRST-QUARTER HIGHLIGHTS

Worldwide system sales increased 5 %.

Worldwide same-store sales increased 2%.

Worldwide core operating profit increased 21%.

EPS excluding Special Items increased 19% to $0.95. Reported EPS increased 14% to $0.93.

Foreign currency translation negatively impacted operating profit by $28 million.

Opened 295 new restaurants worldwide; 72% of international development occurred in emerging markets.

On track with China separation to be complete by year end.

% Change

System Sales

Same-Store Sales

Core Operating Margin (ppts)

China Division

KFC Division

Pizza Hut Division

Taco Bell Division

EPS Excluding Special Items

Special Items Gain/(Loss)

$(0.02)

See Reconciliation of Non-GAAP Measurements to GAAP Results for further detail of Special Items. Special Items in 2016 primarily relate to charges associated with the agreement reached in 2015 with KFC U.S. franchisees and costs associated with the planned separation of our China business.

Effective January 2016, the Company’s India business integrated its three restaurant brands into our global KFC, Pizza Hut and Taco Bell Divisions. Prior year figures have been restated to present comparable results.

: All comparisons are versus the same period a year ago and exclude Special Items unless noted. System sales figures on this page exclude foreign currency translation.

Yum! Brands, Inc. • 1900 Colonel Sanders Lane • Louisville, KY 40213

Tel 502 874-8300 • Website www.yum.com/investors

GREG CREED COMMENTS

Greg Creed, CEO, said "I’m very pleased with our results in the first quarter, including better-than-expected core operating profit growth of 21%, driven by 42% growth in our China business. KFC China had an outstanding Chinese New Year bucket promotion leading to 12% same-store sales growth for the quarter, underscoring the power of delivering insight-driven marketing that resonates with our customers. Companywide, all four of our Divisions posted positive same-store sales and core operating profit growth. I’m especially encouraged by the continued turnaround of our Pizza Hut U.S. business, which delivered 5% same-store sales growth.

While it’s early in the year and there may be bumps in the road, we’re confident in raising core operating profit growth guidance to 12%, from 10% previously. This is a transformational year for our company as we remain on track to finalize the separation of our China business by year end. We look forward to establishing two powerful, independent, focused growth companies dedicated to building on our brand strengths and rewarding our shareholders."

CHINA DIVISION

%/ppts Change

Ex F/X

System Sales Growth

Same-Store Sales Growth (%)

Franchise & License Fees ($MM)

Restaurant Margin (%)

Operating Profit ($MM)

Operating Margin (%)

system sales increased 11%, excluding foreign currency translation.

Same-store sales increased 6%, with an increase of 12% at KFC, partially offset by a decline of 12% at Pizza Hut Casual Dining.

China Division opened 68 new units during the quarter.

China Units

Q1 2016

Restaurants

Home Service

Total includes East Dawning and Little Sheep units.

Represents year-over-year change.

Restaurant margin was 22.4%, an increase of 3.5 percentage points driven by sales leverage at KFC, productivity initiatives and commodity deflation, partially offset by labor inflation.

Foreign currency translation negatively impacted operating profit by $13 million.

Consistent with prior years, China Division's first quarter includes January and February results only. The first quarter includes Chinese New Year, which is peak season for the China Division.

Leap year added an extra day in the quarter, resulting in an additional $6 million of operating profit.

KFC DIVISION

14,941

14,584

system sales increased 5%, excluding foreign currency translation.

First Quarter (% Change)

Int'l Emerging Markets

Int'l Developed Markets

System Sales Growth (Ex F/X)

KFC Division opened 79 new international restaurants in 32 countries, including 56 units in emerging markets. 77% of these new units were opened by franchisees.

Operating margin increased 0.5 percentage points driven by new-unit development.

Core operating profit grew 7% in the quarter excluding the incremental advertising expense associated with the 2015 agreement reached with KFC U.S. franchisees.

Foreign currency translation negatively impacted operating profit by $13 million, as approximately 90% of division profits are generated outside the U.S.

KFC MARKETS

Percent of KFC System Sales

SYSTEM Sales Growth

First Quarter (%)

(e.g. Malaysia, Indonesia, Philippines)

Africa

Latin America

(e.g. Mexico, Peru)

Middle East / North Africa

Russia

Thailand

Continental Europe

(e.g. Poland)

Australia

(e.g. Japan, Korea, Taiwan)

(e.g. France, Germany)

Canada

(e.g. Puerto Rico)

1

See website

for a list of the countries within each of the markets.

2

Reflects Full Year 2015.

PIZZA HUT DIVISION

14,142

14,026

system sales increased 4%, excluding foreign currency translation.

Pizza Hut Division opened 63 new international restaurants in 27 countries, including 30 units in emerging markets. 87% of these new units were opened by franchisees.

Operating margin increased 3.1 percentage points, driven by same-store sales growth and reduced G&A.

Foreign currency translation negatively impacted operating profit by $1 million.

PIZZA HUT MARKETS

Percent of Pizza Hut System Sales

TACO BELL DIVISION

Taco Bell Division

system sales increased 3%, driven by 1% same-store sales growth and 3% unit growth.

Taco Bell Division opened 49 new restaurants; 90% of these new units were opened by franchisees.

Restaurant margin was 21.0%, an increase of 1.5 percentage points driven by favorable U.S. commodities and prior-year pricing actions, partially offset by labor inflation.

Operating margin increased 1.5 percentage points driven by new-unit development and same-store sales growth, partially offset by increased G&A primarily related to higher legal costs.

SPECIAL ITEMS / SHARE REPURCHASE UPDATE

During the first quarter of 2015, we reached an agreement with our KFC U.S. franchisees that gave us brand marketing control, as well as an accelerated path to expanded menu offerings, improved assets and an enhanced customer experience. In connection with this agreement, we recognized a Special Items charge of $9 million during the quarter, primarily related to the funding of investments for new back-of-house equipment for franchisees.

During the quarter, we incurred a Special Items charge of $9 million for costs related to the planned separation of our China business.

Year-to-date through April 19, 2016, we repurchased 13.3 million shares totaling $925 million at an average price of $70. Since we announced our intention to separate the China business, we have repurchased 24.7 million shares totaling $1.8 billion at an average price of $71. This is part of our previously announced plan to return $6.2 billion of capital to shareholders prior to the separation of our China business.

CONFERENCE CALL

Yum! Brands, Inc. will host a conference call to review the Company's financial performance and strategies at 9:15 a.m. Eastern Time Thursday, April 21, 2016. The number is 877/815-2029 for U.S. callers and 706/645-9271 for international callers, conference ID 67267109.

The call will be available for playback beginning at 12:30 p.m. Eastern Time Thursday, April 21, 2016 through midnight Wednesday, May 18, 2016.

To access the playback, dial 855/859-2056 in the U.S. and 404/537-3406 internationally, conference ID 67267109.

The webcast and the playback can be accessed via the internet by visiting Yum! Brands' website,

and selecting “Q1 2016 Earnings Conference Call” under “Events & Presentations.”

ADDITIONAL INFORMATION ONLINE

Quarter end dates for each division, restaurant-count details and definitions of terms are available online at

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,” “will,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements reflect our current expectations, estimates or projections concerning future results or events, including, without limitation, statements regarding the intended capital return to shareholders as well as the related borrowing required to fund such capital return, the planned separation of the Yum! Brands and Yum! China businesses, the timing of any such separation, the future earnings and performance as well as capital structure of Yum! Brands, Inc. or any of its businesses, including the Yum! Brands and Yum! China businesses on a standalone basis if the separation is completed. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. 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. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to return capital to shareholders at the times and in the amounts currently anticipated, if at all, as well as the corresponding costs of borrowing to fund such capital return as well as other costs; whether the separation of the Yum! Brands and Yum! China businesses is completed, as expected or at all, and the timing of any such separation; whether the operational and strategic benefits of the separation can be achieved; whether the costs and expenses of the separation can be controlled within expectations, including potential tax costs; as well as other risks. 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. 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 Annual Report or Form 10-K) for additional detail about factors that could affect our financial and other results. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures are included on our website at

Yum! Brands, Inc., based in Louisville, Kentucky, has nearly 43,000 restaurants in more than 130 countries and territories. Yum! is ranked #228 on the Fortune 500 List with revenues of over $13 billion in 2015 and is one of the Aon Hewitt Top Companies for Leaders in North America. The Company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development.

Analysts are invited to contact:

Steve Schmitt, Vice President, Investor Relations & Corporate Strategy, at 888/298-6986

Elizabeth Grenfell, Director, Investor Relations, at 888/298-6986

Members of the media are invited to contact:

Virginia Ferguson, Director, Public Relations, at 502/874-8200

YUM! Brands, Inc.

Condensed Consolidated Summary of Results

(amounts in millions, except per share amounts)

(unaudited)

Quarter ended

3/19/16

3/21/15

Company sales

Franchise and license fees and income

Total revenues

Company restaurant expenses

Food and paper

Payroll and employee benefits

Occupancy and other operating expenses

General and administrative expenses

Franchise and license expenses

Closures and impairment (income) expenses

Refranchising (gain) loss

Other (income) expense

Total costs and expenses, net

Interest expense, net

Income before income taxes

Income tax provision

Net income - including noncontrolling interests

Net income (loss) - noncontrolling interests

Net income - YUM! Brands, Inc.

Effective tax rate

(1.6 ppts.)

Basic EPS Data

Average shares outstanding

Diluted EPS Data

Dividends declared per common share

See accompanying notes.

Percentages may not recompute due to rounding.

CHINA DIVISION Operating Results

(amounts in millions)

1.7 ppts.

0.5 ppts.

1.3 ppts.

3.5 ppts.

4.6 ppts.

KFC DIVISON Operating Results

0.9 ppts.

(0.8 ppts.)

0.3 ppts.

0.4 ppts.

PIZZA HUT DIVISION Operating Results

(0.3 ppts.)

(0.6 ppts.)

(0.5 ppts.)

3.1 ppts.

TACO BELL DIVISION Operating Results

2.7 ppts.

1.5 ppts.

Condensed Consolidated Balance Sheets

12/26/15

ASSETS

Current Assets

Cash and cash equivalents

Accounts and notes receivable, less allowance: $20 in 2016 and $16 in 2015

Inventories

Prepaid expenses and other current assets

Advertising cooperative assets, restricted

Total Current Assets

Property, plant and equipment, net of accumulated depreciation and amortization of $3,682 in

2016 and $3,643 in 2015

Goodwill

Intangible assets, net

Investments in unconsolidated affiliates

Other assets

Deferred income taxes

Total Assets

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable and other current liabilities

Income taxes payable

Short-term borrowings

Advertising cooperative liabilities

Total Current Liabilities

Long-term debt

Other liabilities and deferred credits

Total Liabilities

Redeemable noncontrolling interest

Shareholders' Equity

Common stock, no par value, 750 shares authorized; 407 shares and 420 shares issued in 2016 and 2015, respectively

Retained earnings

Accumulated other comprehensive income (loss)

Total Shareholders' Equity - YUM! Brands, Inc.

Noncontrolling interests

Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity

See accompanying notes.

Condensed Consolidated Statements of Cash Flows

Cash Flows - Operating Activities

Depreciation and amortization

Contributions to defined benefit pension plans

Equity income from investments in unconsolidated affiliates

Excess tax benefit from share-based compensation

Share-based compensation expense

Changes in accounts and notes receivable

Changes in inventories

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

Changes in short-term investments, net

Proceeds from refranchising of restaurants

Net Cash Used in Investing Activities

Cash Flows - Financing Activities

Repayments of long-term debt

Short-term borrowings by original maturity

More than three months - proceeds

More than three months - payments

Three months or less, net

Revolving credit facilities, three months or less, net

Repurchase shares of Common Stock

Employee stock option proceeds

Dividends paid on Common Stock

Net Cash Used in Financing Activities

Effect of Exchange Rate on Cash and Cash Equivalents

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents - Beginning of Period

Cash and Cash Equivalents - End of Period

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements which present operating results in 2016 and 2015 on a basis before Special Items. Included in Special Items are gains/(losses) associated with the costs associated with the planned spin-off of the China business and YUM recapitalization, costs associated with the KFC U.S. Acceleration Agreement and certain refranchising initiatives. These amounts are described in (c), (d) and (e) in the accompanying notes.

The Company uses earnings before Special Items as a key performance measure of results of operations for the purpose of evaluating performance internally and Special Items are not included in any of our segment results. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of earnings before Special Items provides additional information to investors to facilitate the comparison of past and present operations, excluding items in the quarters ended

March 19, 2016

March 21, 2015

that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.

Detail of Special Items

Costs associated with the planned spin-off of the China business and YUM recapitalization

Costs associated with KFC U.S. Acceleration Agreement

Refranchising initiatives

Total Special Items Income (Expense)

Tax Benefit (Expense) on Special Items

Special Items Income (Expense), net of tax

Average diluted shares outstanding

Special Items diluted EPS

Reconciliation of Operating Profit Before Special Items to Reported Operating Profit

Reconciliation of EPS Before Special Items to Reported EPS

Diluted EPS Before Special Items

Special Items EPS

Reconciliation of Effective Tax Rate Before Special Items to Reported Effective Tax Rate

Impact on Tax Rate as a result of Special Items

Segment Results

Quarter Ended 3/19/16

Corporate and Unallocated

Operating Profit (loss)

Quarter Ended 3/21/15

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Summary of Results. Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.

The Corporate and Unallocated column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See Reconciliation of Non-GAAP Measurements to GAAP Results.

Notes to the Condensed Consolidated Summary of Results, Condensed Consolidated Balance Sheets

and Condensed Consolidated Statements of Cash Flows

Amounts presented as of and for the quarter ended March 19, 2016 are preliminary.

Other (income) expense for the China Division primarily consists of equity (income) loss from investments in unconsolidated affiliates.

In October, 2015 we announced our intent to separate YUM’s China business from YUM into an independent, publicly-traded company by the end of 2016. This transaction, which is expected to be a tax-free spin-off of our China business, will create two powerful, independent, focused growth companies with distinct strategies, financial profiles and investment characteristics. Additionally, we plan to optimize the capital structure of YUM! Brands through the issuance of new debt that will allow us to return significant capital to shareholders. During the quarter ended March 19, 2016 we incurred costs of $9 million related to these initiatives.

During the first quarter of 2015, we reached an agreement with our KFC U.S. franchisees that gave us brand marketing control as well as an accelerated path to improved assets and customer experience. In connection with this agreement we recognized Special Item charges for the quarter ended March 19, 2016 of $9 million, primarily related to the funding of investments for new back-of-house equipment for franchisees.

We have historically recorded refranchising gains and losses in the U.S. as Special Items due to the scope of our refranchising program and the volatility in associated gains and losses. Beginning in 2016, we are also including all international refranchising gains and losses, excluding China, in Special Items. The inclusion in Special Items of these additional international refranchising gains and losses is the result of the anticipated size and volatility of refranchising initiatives outside the U.S. that will take place in connection with our previously announced plans to have 96% franchise ownership by the end of 2017. During the quarters ended March 19, 2016 and March 21, 2015 we recorded refranchising gains of $3 million and $7 million, respectively, that have been reflected as Special Items.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Other definitive proxy statements - April 8, 2016
Yum!: Confidential, For Use Of The Commission Only (As Permitted By Rule 14A-6(E)(2)) Definitive Proxy Statement Definitive Additional Materials - April 8, 2016
Yum! Brands's Chief People Officer just picked up 1,195 shares - April 4, 2016
Yum! Brands's CEO just picked up 77 shares - April 4, 2016