Exhibit 99.1
Yum! Brands Inc. Reports Third-Quarter Earnings Per Share, EPS, of
$0.54 Prior to Special Items. Including a Special Items Charge of
$0.01, Reported EPS Was $0.53.
LOUISVILLE, Ky.--(BUSINESS WIRE)--Oct. 7, 2003--Yum! Brands Inc.
(NYSE: YUM):
-- INCREASES FULL-YEAR 2003 EPS GUIDANCE TO AT LEAST $2.03 PRIOR
TO SPECIAL ITEMS. REPORTED EPS IS EXPECTED TO BE $1.94,
INCLUDING $0.09 OF SPECIAL-ITEMS CHARGES.
-- REPORTS PERIOD 10 ESTIMATED INTERNATIONAL SYSTEM SALES
INCREASED 14% IN U.S. DOLLAR TERMS OR 10% PRIOR TO U.S. DOLLAR
CONVERSION.
-- REPORTS PERIOD 10 ESTIMATED U.S. BLENDED SAME-STORE SALES AT
COMPANY RESTAURANTS INCREASED 1% VERSUS LAST YEAR.
Yum! Brands Inc. today reported results for the third quarter
ended September 6, 2003.
Key highlights for the quarter were
-- 6% increase in traditional international restaurants in
operation versus end of third quarter 2002.
-- 20% increase in international franchise and license fees
versus third quarter 2002.
-- 18% increase in U.S. multibrand restaurants in operation
versus end of third quarter 2002.
-- The company paid down debt of $137 million, invested capital
of $145 million and repurchased shares, spending $39 million.
The company took a $6.8 million pretax special-items charge this
quarter for interest charges related to the previously announced legal
judgment against Taco Bell in Wrench v. Taco Bell Corp. The company
plans to appeal the original jury verdict, and if unsuccessful on
appeal, intends to seek reimbursement from appropriate parties. Future
interest charges will be accrued until the appeal process is
concluded.
Financial Highlights
(million, except unit counts and per-diluted-share amounts)
- ----------------------------------------------------------------------
Third % Change Year % Change
Quarter Vs. to Date Vs.
2003 Prior Year 2003 Prior Year
------- ---------- ------- ----------
Traditional System Units 30,598 2 30,598 2
Revenues $1,989 4 $5,727 8
- ----------------------------------------------------------------------
EPS before Special Items $0.54 17 $1.41 11
- ----------------------------------------------------------------------
Special Items EPS $0.01 NM $0.09 NM
- ----------------------------------------------------------------------
Reported EPS $0.53 14 $1.32 Even
- ----------------------------------------------------------------------
Notes to the preceding comments and table:
"System Units" excludes licensed locations and includes
company-owned, franchise and joint-venture restaurants.
"Special Items" include AmeriServe and other charges (credits),
which were previously referred to as unusual items in 2002, Wrench
litigation and cumulative effect of accounting change, net of tax. See
attachments to this press release for reconciliations of non-GAAP
measurements to GAAP results.
See the attachments to this press release for a description of
Estimated System Sales, a key operating metric.
David C. Novak, Chairman and CEO, said: "Continued robust new
international restaurant growth, a strengthening in international
same-store sales versus our expectations and another solid performance
by Taco Bell contributed to 17 percent growth in EPS before special
items. Additionally, Pizza Hut had one of its best quarters in
same-store-sales growth since the first half of 2001.
"While both Pizza Hut and Taco Bell had positive sales
performances, continued weakness at KFC negatively impacted U.S.
blended same-store-sales results. We have made a major change in the
KFC brand's leadership by appointing a new president and a new chief
marketing and food innovation officer. We fully expect this team to
turn around KFC's business performance.
"Given our overall performance and the strength of the largest
businesses in our global portfolio, we are increasing our 2003 EPS
guidance to at least $2.03 before special items. We are confident,
looking ahead to 2004, of continuing to deliver our stated goal of at
least 10 percent growth in EPS. Our confidence is based on the
progress we are making towards executing our three key strategies:
international new-restaurant growth, U.S. multibrand innovation and
expansion, and differentiation of our core-brand portfolio by
dramatically improving U.S. restaurant operations. This combination of
strategies is unique to the restaurant industry and makes us anything
but an ordinary restaurant company."
Following is an update on Yum! Brands' international and U.S.
businesses as well as key business-growth drivers, which include
international expansion, multibrand innovation and expansion in the
U.S., portfolio of category-leading brands, franchise-fee growth and
substantial cash generation with high returns.
INTERNATIONAL BUSINESS
- ----------------------
- ----------------------------------------------------------------------
Third Quarter Year to Date
----------------------------------------------------------
million, Incr/(Decr) Incr/(Decr)
except unit----------------------------------------------------------
counts and Excl Excl
percentages 2003 2002 Reported F/x 2003 2002 Reported F/x
----------------------------------------------------------
Revenues $652 $593 +10% +6% $1,810 $1,640 +10% +6%
Restaurant (1.0) (0.8) (1.0) (0.8)
Margin % 15.9 16.9 ppt ppt 15.2 16.2 ppt ppt
Operating
Profit $114 $90 +26% +19% $297 $249 +19% +13%
- ----------------------------------------------------------------------
Operating
Metrics
Traditional
System
Units 11,845 11,202 +6% NM 11,845 11,202 +6% NM
Est. System-
Sales
Growth +12% +6% +13% +6%
- ----------------------------------------------------------------------
Notes to the preceding table:
"Excl F/x" is prior to foreign currency conversion to U.S.
dollars.
"Traditional System Units" excludes licensed locations and
includes company-owned, franchise and joint-venture restaurants.
See the attachments to this press release for a description of
Estimated System Sales, a key operating metric.
In the third quarter for the company's international business,
continued expansion of our key international brands -- KFC and Pizza
Hut -- was the primary driver of revenue and operating-profit growth.
Same-store sales in company markets and the overall system were down
versus last year. Markets and businesses with positive same-store
sales included KFC Australia, the U.K., Pizza Hut Korea, the Middle
East and KFC South Africa. Markets and businesses experiencing
negative growth included China, Japan, Mexico and Taiwan KFC.
Restaurant margins were down in the third quarter primarily due to
sales deleverage in Mexico. The favorable impact of foreign currency
conversion added $6 million to operating profit for the third quarter.
UNITED STATES BUSINESS
- ----------------------
- ----------------------------------------------------------------------
Third Quarter Year to Date
----------------------------------------------------
million, except
unit counts and
percentages 2003 2002 Incr/(Decr) 2003 2002 Incr/(Decr)
----------------------------------------------------
Revenues $1,337 $1,322 +1% $3,917 $3,656 +7%
Restaurant (1.4) (1.8)
Margin % 14.8 16.2 ppts 14.5 16.3 ppts
Operating Profit $204 $205 Even $572 $563 +2%
- ----------------------------------------------------------------------
Operating Metrics
Traditional System
Units 18,753 18,861 (1)% 18,753 18,861 (1)%
Multibrand Units 2,018 1,715 +18% 2,018 1,715 18%
Est. System-Sales
Growth Even +4%
- ----------------------------------------------------------------------
Notes to the preceding table:
"Traditional System Units" excludes licensed locations and
includes company-owned, franchise and joint-venture restaurants.
See the attachments to this press release for a description of
Estimated System Sales, a key operating metric.
In the third quarter, U.S. blended same-store sales for franchise
(estimated) and company restaurants were both even with the same
period last year.
In the third quarter, U.S. restaurant margin was negatively
impacted by sales deleverage at KFC, higher commodity costs (primarily
cheese and beef) and higher occupancy costs.
Traditional system units decreased slightly primarily due to A&W
single-brand and Pizza Hut dine-in restaurant closures. The company
expects these modest restaurant declines will continue in the near
term for these two brands. A&W distribution is expected to grow as the
brand is paired with KFC and Long John Silver's in a multibrand
format. This expanded A&W distribution would be reflected in KFC and
Long John Silver's multibrand units. Taco Bell and KFC restaurant
counts were approximately even versus the prior year.
WORLDWIDE NEW-RESTAURANT DEVELOPMENT
- ------------------------------------
- ----------------------------------------------------------------------
New-Restaurant Openings Third Quarter Year to Date
------------- --------------
Worldwide 305 865
International 213 616
United States 92 249
- ----------------------------------------------------------------------
Note to the preceding table:
"New-Restaurant Openings" excludes licensed locations.
Worldwide new-restaurant openings for the third quarter were
driven by growth in new international restaurants from our global
brands: KFC and Pizza Hut. Primary growth drivers were four key
international markets -- China, the U.K., Mexico and Korea -- with 94
new restaurant openings this quarter. Franchise and joint-venture
partners opened 70% of systemwide new international restaurants year
to date. Net traditional restaurant count increased 31% in China, 12%
in Mexico, 9% in the U.K., and 2% in Korea versus the end of the third
quarter 2002. In key franchise markets year-over-year unit growth was
10% in Asia, 5% in the Middle East, 4% in South Africa and 5% in
Caribbean/Latin America.
This discussion excludes changes in licensed-unit locations, which
are expected to have no material impact on the company's overall
profit performance in 2003. Licensed locations are typically
nontraditional sites, such as airports, that normally have
substantially lower average unit volumes than traditional restaurant
locations.
MULTIBRAND EXPANSION
- --------------------
- ----------------------------------------------------------------------
Third Quarter
Multibrand Restaurants in Operation 2003 2002 Incr/(Decr)
------ ------ -----------
U.S. Systemwide 2,018 1,715 +18%
% U.S. System Units 11% 9% +2 ppts
- ----------------------------------------------------------------------
Note to the preceding table:
"System Units" excludes licensed locations.
In the third quarter, 108 multibrand restaurants were added in the
U.S., bringing the total to 234 U.S. multibrand additions year to
date. In the U.S., third-quarter company and franchise additions were
65 and 43 respectively. Approximately 50% of the U.S. multibrand
additions are expected to be conversions of existing single-brand
restaurants, and 50% are expected to be new-restaurant openings for
full year 2003.
FRANCHISE GROWTH AND FEES
- -------------------------
- ----------------------------------------------------------------------
Third Quarter Year to Date
------------- ------------
Franchise Restaurant Net Growth Vs. Q3 2002 +1% +1%
Total Franchise Fees ($ million) $224 $642
Growth Vs. 2002 +6% +8%
- ----------------------------------------------------------------------
Notes to the preceding table:
"Franchise Restaurant" includes joint ventures; excludes licensed
restaurants.
"Franchise Fees" includes fees from joint ventures and licensed
restaurants. Fees are for ongoing royalties and initial fees.
For the third quarter, favorable foreign currency conversion added
2 percentage points of franchise-fee growth. Excluding foreign
currency conversion, franchise fees increased 4%, primarily driven by
net new-restaurant development and increased international royalty
rates.
CASH-FLOW GENERATION
- --------------------
- ----------------------------------------------------------------------
$ million cash inflow/(cash outflow) Third Quarter Year to Date
------------- ------------
Net Cash Provided by Operating Activities 405 769
Proceeds from Refranchising Restaurants - 11
Employee Stock-Option Proceeds 36 70
Sales of Property, Plant and Equipment 9 29
------------- ------------
Total Cash Generated 450 879
- ----------------------------------------------------------------------
Capital Spending and Franchise Acquisitions (145) (388)
Debt -- Net Proceeds/(Payments) (137) (218)
Repurchase Shares of Common Stock (39) (121)
- ----------------------------------------------------------------------
Notes to the preceding table:
-- See the attachments to this press release for reconciliations
of non-GAAP measurements to GAAP results.
-- Number of shares repurchased: 1,330,000 in the third quarter
and 4,657,700 year to date.
-- See the attachments to this press release for the Condensed
Consolidated Statement of Cash Flows.
For third quarter and year to date, the company more than funded
capital spending with net cash provided by operating activities.
Additional cash was generated from employee stock-option proceeds and
sales of property, plant and equipment. As a result, the company was
able to reduce debt and repurchase stock as indicated in the preceding
table.
Subsequent to the end of the quarter, the company contributed $130
million in cash to the closed pension plan.
FOURTH-QUARTER 2003 OUTLOOK
The company is comfortable with the current consensus estimate of
$0.62 in reported EPS in the fourth quarter. At this time, the company
expects no net special-items EPS impact in the quarter. This is an
increase of $0.07, or 11%, compared to last year's performance, prior
to a gain of $0.01 from special items in 2002.
Projected factors contributing to the company's EPS expectations
are
-- International system-sales growth of +8% to +9% prior to
foreign currency conversion, or +12% to +13% after conversion
to U.S. dollars. Year-over-year net growth in international
traditional restaurants of +5% to +6% will be the primary
driver with slightly positive same-store-sales growth expected
systemwide.
-- Based on current foreign currency rates, the company expects a
benefit of $5 to $6 million from foreign currency conversion
on operating profit for the fourth quarter. The Chinese
renminbi, British pound sterling, Australian dollar, Korean
won, Japanese yen, Canadian dollar, and Mexican peso are
important currencies in the company's international business.
-- U.S. blended same-store-sales growth for company restaurants
of approximately 1%.
-- Worldwide company restaurant margin is expected to be down
approximately 1.5 percentage points from fourth quarter last
year. International margin is expected to decline by
approximately 1 percentage point.
-- General and administrative expenses flat versus last year in
U.S. dollar terms.
-- Interest expense down approximately $9 million from last year.
-- Refranchising gains slightly higher than last year.
-- A targeted tax rate before special items of 29% to 31% versus
30% last year.
ANNUAL OUTLOOK
The company expects earnings per share to grow at least 10% each
year with the continued execution of its three key strategies: (1)
international new-restaurant growth; (2) multibrand restaurant
innovation and expansion in the U.S.; and (3) dramatically improving
restaurant operations and differentiating our core-brand portfolio.
For 2003, the company expects worldwide revenue growth of 7% to
8%, which includes 2 percentage points from the favorable impact of
the Long John Silver's and A&W acquisition, at least 2% worldwide
traditional system restaurant growth and U.S. company blended
same-store sales even with last year.
- ----------------------------------------------------------------------
Forecast Actual
2003 2002 Incr/(Decr)
-------- ------ -----------
EPS Before Special Items $2.03 $1.82 +11%
Special Items EPS $(0.09) $0.06 NM
-------- ------
Reported EPS $1.94 $1.88 +3%
- ----------------------------------------------------------------------
PERIOD 10 SALES
Period 10 estimated international system sales increased 10% prior
to foreign currency conversion or 14% after conversion to U.S.
dollars. Estimated U.S. blended same-store sales at company
restaurants increased 1% versus last year for the comparable four-week
period ended October 4, 2003 (Period 10).
INTERNATIONAL SYSTEM Sales Growth (Estimated)
- ---------------------------------------------
- ----------------------------------------------------------------------
Prior-Year
Reported (U.S.$) Local Currency Basis Local Currency Basis
----------------- -------------------- --------------------
Period 10 +14% +10% +9%
- ----------------------------------------------------------------------
U.S. Company Same-Store Sales Growth (Estimated)
- ------------------------------------------------
- ----------------------------------------------------------------------
Period 10 Period 10
Current Year Prior Year
------------ ----------
U.S. BLENDED +1% (1)%
Taco Bell +3% +3%
Pizza Hut +1% +3%
KFC (1)% (10)%
- ----------------------------------------------------------------------
NOTES
Sales results for Period 11 (the four-week period ending November
1, 2003), are scheduled to be released November 6, 2003, before market
hours.
U.S. same-store sales include only company restaurants that have
been open one year or more. U.S. blended same-store sales include KFC,
Pizza Hut, and Taco Bell company-owned restaurants only. U.S.
same-store sales for Long John Silver's and A&W restaurants are not
included. U.S. franchise and systemwide same-store sales results are
reported quarterly within the company's earnings release and include
only KFC, Pizza Hut and Taco Bell Restaurants.
International system sales include the total of sales from
approximately 12,000 company, franchise, license, and joint-venture
restaurants in over 100 countries and territories outside the United
States. The international business period close is one period prior to
the company's period-end date to facilitate consolidated reporting.
Please refer to the reporting calendar posted on Yum! Brands' web site
at the following URL:
http://investors.yum.com/ireye/ir_site.zhtml?ticker=YUM&script=1000.
CONFERENCE CALL
Yum! Brands Inc. will hold a conference call to review the
company's financial performance and strategies at 9:15 a.m. EDT
Wednesday, October 8, 2003.
For U.S. callers, the number is 877/815-2029. For international
callers, the number is 706/645-9271.
The call will be available for playback beginning Wednesday,
October 8, at 12:15 p.m. EDT through Friday, October 24, at midnight
EDT. To access the playback, dial 800/642-1687 in the U.S.A. and
706/645-9291 internationally. The playback pass code is 2511659.
The call and the playback can be accessed via the Internet by
visiting Yum! Brands' web site: www.yum.com and selecting "3rd Quarter
Earnings Webcast." (Windows Media Player is required, which can be
downloaded at no charge from the following URL:
http://www.microsoft.com/windows/windowsmedia/players.asp. The process
could take several minutes.)
2003 ANNUAL CONFERENCE FOR INVESTORS & ANALYSTS
Please note, Wednesday, December 10, Yum! Brands will host the
company's Annual Conference for Investors and Analysts from
approximately 8:00 a.m. to 1:00 p.m. Eastern Time, at The St. Regis
Hotel in New York. Everyone is invited, but on-line registration is
required before 5:00 p.m. Eastern Time Friday, December 5. To
register, please log on to the following URL:
www.regweb.com/Yum/03IRConference.
If you have questions, call Yum! Brands Investor Relations at
888/298-6986.
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements include those identified by such words as may, will,
expect, project, anticipate, believe, plan and other similar
terminology. These "forward-looking" statements reflect management's
current expectations regarding future events and operating and
financial performance and are based on currently available data.
However, actual results are subject to future events and
uncertainties, which could cause actual results to differ from those
projected in this announcement. Factors that can cause actual results
to differ materially include changes in global and local business,
economic and political conditions in the countries and territories
where Yum! Brands operates; changes in currency exchange and interest
rates; changes in commodity, labor and other operating costs; changes
in competition in the food industry, consumer preferences, spending
patterns and demographic trends; the effectiveness of our operating
initiatives and advertising and promotional efforts; new-product and
concept development by Yum! Brands and other food-industry
competitors; the success of our refranchising strategy; the ongoing
business viability of our franchise and license operators; our ability
to secure alternative distribution to our restaurants at competitive
rates and to ensure adequate supplies of restaurant products and
equipment in our stores; the impact that Severe Acute Respiratory
Syndrome (SARS) may have on our business and the economy of the
countries in which we operate; our actuarially determined casualty
loss estimates; changes in legislation and governmental regulations;
and changes in accounting policies and practices. Further information
about factors that could affect Yum! Brands' financial and other
results are included in the company's Forms 10-Q and 10-K, filed with
the Securities and Exchange Commission.
Yum! Brands, Inc., based in Louisville, Kentucky, is the world's
largest restaurant company in terms of system units with approximately
33,000 restaurants in more than 100 countries and territories. Four of
the company's restaurant brands --KFC, Pizza Hut, Taco Bell and Long
John Silver's-- are the global leaders of the chicken, pizza,
Mexican-style food and quick-service seafood categories respectively.
Yum! Brands is the worldwide leader in multibranding, which offers
consumers more choice and convenience at one restaurant location from
a combination of KFC, Taco Bell, Pizza Hut, A&W or Long John Silver's
brands. The company and its franchisees today operate over 2,000
multibrand restaurants. Outside the United States in 2002, the Yum!
Brands' system opened about three new restaurants each day of the
year, making it one of the fastest growing retailers in the world. In
2002, the company changed its name to Yum! Brands, Inc., from Tricon
Global Restaurants, Inc., to reflect its expanding portfolio of brands
and its ticker symbol on the New York Stock Exchange.
Analysts are invited to contact
Tim Jerzyk, Vice President Investor Relations, at 888/298-6986
Individual shareholders are invited to contact
Lynn Schweinfurth, Director Investor Relations, at 888/298-6986
Members of the media are invited to contact
Amy Sherwood, Vice President Public Relations, at 502/874-8200
Yum! Brands, Inc.
Condensed Consolidated Statements of Income
(amounts in millions, except per share amounts)
Quarter % Change Year to date % Change
--------------- ---------------
9/6/03 9/7/02 B/(W) 9/6/03 9/7/02 B/(W)
------- ------- --------- ------- ------- ---------
Revenues
Company sales $1,765 $1,705 4 $5,085 $4,702 8
Franchise and
license fees 224 210 6 642 594 8
------- ------- ------- -------
Revenues 1,989 1,915 4 5,727 5,296 8
------- ------- ------- -------
Costs and expenses,
net
Company restaurants
Food and paper 544 517 (5) 1,568 1,438 (9)
Payroll and
employee benefits 473 457 (4) 1,396 1,274 (10)
Occupancy and
other operating
expenses 481 450 (7) 1,373 1,224 (12)
------- ------- ------- -------
1,498 1,424 (5) 4,337 3,936 (10)
General and
administrative
expenses 212 219 3 623 616 (1)
Franchise and
license expenses 7 12 46 20 31 37
Other (income)
expense (7) 9 NM (13) 21 NM
Refranchising net
loss (gain) 6 (3) NM 13 (9) NM
Wrench litigation 7 - NM 42 - NM
AmeriServe and
other charges
(credits) (3) (4) NM (1) (24) NM
------- ------- ------- -------
Total costs and
expenses, net 1,720 1,657 (4) 5,021 4,571 (10)
------- ------- ------- -------
Operating profit 269 258 4 706 725 (3)
Interest expense,
net 39 45 14 123 112 (9)
------- ------- ------- -------
Income before
income taxes and
cumulative
effect of
accounting
change 230 213 8 583 613 (5)
Income tax
provision 66 66 - 179 202 11
------- ------- ------- -------
Income before
cumulative effect
of accounting
change 164 147 12 404 411 (2)
Cumulative effect
of accounting
change, net of
tax - - - (1) - NM
------- ------- ------- -------
Net income $164 $147 12 $403 $411 (2)
======= ======= ======= =======
Basic EPS Data
- -------------------
EPS $0.56 $0.49 13 $1.37 $1.39 (1)
======= ======= ======= =======
Average shares
outstanding 294 297 1 293 296 1
======= ======= ======= =======
Diluted EPS Data
- -------------------
EPS $0.53 $0.47 14 $1.32 $1.32 -
======= ======= ======= =======
Average shares
outstanding 307 312 2 305 312 2
======= ======= ======= =======
See accompanying notes.
Wrench litigation, AmeriServe and other charges (credits) and
Cumulative effect of accounting change, net of tax have been summed
and referred to as "Special Items" throughout this press release. See
accompanying reconciliation of non-GAAP measurements to GAAP results.
Yum! Brands, Inc.
WORLDWIDE Operating Results
(amounts in millions)
Quarter % Change Year to date % Change
--------------- -------------
9/6/03 9/7/02 B/(W) 9/6/03 9/7/02 B/(W)
------- ------- ------------ ------- ------- ------------
Company
sales $1,765 $1,705 4 $5,085 $4,702 8
Franchise and
license fees 224 210 6 642 594 8
------- ------- ------- -------
Revenues 1,989 1,915 4 5,727 5,296 8
------- ------- ------- -------
Company
restaurants
Food and
paper 544 517 (5) 1,568 1,438 (9)
Payroll and
employee
benefits 473 457 (4) 1,396 1,274 (10)
Occupancy
and other
operating
expenses 481 450 (7) 1,373 1,224 (12)
------- ------- ------- -------
1,498 1,424 (5) 4,337 3,936 (10)
General and
administrative
expenses 212 219 3 623 616 (1)
Franchise and
license
expenses 7 12 46 20 31 37
Other
(income)
expense (7) 9 NM (13) 21 NM
Refranchising
net loss
(gain) 6 (3) NM 13 (9) NM
------- ------- ------- -------
1,716 1,661 (3) 4,980 4,595 (8)
------- ------- ------- -------
Operating
profit before
special items 273 254 8 747 701 7
Interest
expense, net 39 45 14 123 112 (9)
Income tax
provision 67 65 (5) 194 194 (1)
------- ------- ------- -------
Earnings
before special
items $167 $144 16 $430 $395 9
======= ======= ======= =======
Tax rate
before special
items and
cumulative
effect of
accounting
change 29.0% 31.0% 2.0 ppts. 31.1% 32.8% 1.7 ppts.
======= ======= ======= =======
Company
sales 100.0% 100.0% 100.0% 100.0%
Food and
paper 30.8 30.3 (0.5) ppts. 30.8 30.6 (0.2) ppts.
Payroll and
employee
benefits 26.8 26.8 - 27.5 27.1 (0.4) ppts.
Occupancy and
other
operating
expenses 27.3 26.5 (0.8) ppts. 27.0 26.0 (1.0) ppts.
------- ------- ------- -------
Restaurant
margin 15.1% 16.4% (1.3) ppts. 14.7% 16.3% (1.6) ppts.
======= ======= ======= =======
Reconciliation of Segment Operating Profit to Reported Operating
Profit
- ----------------------------------------------------------------------
U.S. operating
profit $204 $205 - $572 $563 2
International
operating
profit 114 90 26 297 249 19
Unallocated
and corporate
expense (38) (43) 11 (107) (119) 10
Unallocated
other income
(expense) (1) (1) NM (2) (1) NM
Refranchising
net gain
(loss) (6) 3 NM (13) 9 NM
------- ------- ------- -------
Operating
profit before
special items 273 254 8 747 701 7
Wrench
litigation (7) - NM (42) - NM
AmeriServe
and other
(charges)
credits 3 4 NM 1 24 NM
------- ------- ------- -------
Reported
operating
profit $269 $258 4 $706 $725 (3)
======= ======= ======= =======
See accompanying notes and reconciliations of non-GAAP measurements to
GAAP results.
Yum! Brands, Inc.
UNITED STATES Operating Results
(amounts in millions)
Quarter % Change Year to date % Change
--------------- ---------------
9/6/03 9/7/02 B/(W) 9/6/03 9/7/02 B/(W)
------- ------- ------------ ------- ------- ------------
Company
sales $1,199 $1,183 1 $3,518 $3,262 8
Franchise and
license fees 138 139 (1) 399 394 1
------- ------- ------- -------
Revenues 1,337 1,322 1 3,917 3,656 7
------- ------- ------- -------
Company restaurants
Food and paper 344 330 (4) 1,010 916 (10)
Payroll and
employee
benefits 366 361 (2) 1,093 1,005 (9)
Occupancy and
other operating
expenses 311 299 (4) 905 808 (12)
------- ------- ------- -------
1,021 990 (3) 3,008 2,729 (10)
General and
administrative
expenses 108 112 4 325 318 (2)
Franchise and
license
expenses 4 9 63 10 24 59
Other (income)
expense - 6 NM 2 22 NM
------- ------- ------- -------
1,133 1,117 (1) 3,345 3,093 (8)
------- ------- ------- -------
Operating
profit $204 $205 - $572 $563 2
======= ======= ======= =======
Company sales 100.0% 100.0% 100.0% 100.0%
Food and paper 28.7 28.0 (0.7) ppts. 28.7 28.1 (0.6) ppts.
Payroll and
employee
benefits 30.6 30.5 (0.1) ppts. 31.1 30.8 (0.3) ppts.
Occupancy and
other operating
expenses 25.9 25.3 (0.6) ppts. 25.7 24.8 (0.9) ppts.
------- ------- ------- -------
Restaurant
margin 14.8% 16.2% (1.4) ppts. 14.5% 16.3% (1.8) ppts.
======= ======= ======= =======
See accompanying notes.
Yum! Brands, Inc.
INTERNATIONAL Operating Results
(amounts in millions)
Quarter % Change Year to date % Change
--------------- ---------------
9/6/03 9/7/02 B/(W) 9/6/03 9/7/02 B/(W)
------- ------- ------------ ------- ------- ------------
Company sales $566 $522 8 $1,567 $1,440 9
Franchise and
license fees 86 71 20 243 200 21
------- ------- ------- -------
Revenues 652 593 10 1,810 1,640 10
------- ------- ------- -------
Company
restaurants
Food and paper 200 187 (7) 558 522 (7)
Payroll and
employee
benefits 107 96 (11) 303 269 (13)
Occupancy and
other operating
expenses 170 151 (12) 468 416 (12)
------- ------- ------- -------
477 434 (10) 1,329 1,207 (10)
General and
administrative
expenses 67 64 (4) 192 179 (7)
Franchise and
license
expenses 2 3 7 9 7 (41)
Other (income)
expense (8) 2 NM (17) (2) NM
------- ------- ------- -------
538 503 (7) 1,513 1,391 (9)
------- ------- ------- -------
Operating
profit $114 $90 26 $297 $249 19
======= ======= ======= =======
Company sales 100.0% 100.0% 100.0% 100.0%
Food and paper 35.2 35.6 0.4 ppts. 35.6 36.2 0.6 ppts.
Payroll and
employee
benefits 18.9 18.4 (0.5) ppts. 19.3 18.7 (0.6) ppts.
Occupancy and
other operating
expenses 30.0 29.1 (0.9) ppts. 29.9 28.9 (1.0) ppts.
------- ------- ------- -------
Restaurant
margin 15.9% 16.9% (1.0) ppts. 15.2% 16.2% (1.0) ppts.
======= ======= ======= =======
See accompanying notes.
YUM! Brands, Inc.
Condensed Consolidated Balance Sheets
(amounts in millions)
9/6/03 12/28/02
--------- ---------
ASSETS
Current Assets
Cash and cash equivalents $298 $130
Short-term investments, at cost 26 27
Accounts and notes receivable, less allowance: $32
in 2003 and $42 in 2002 186 168
Inventories 67 63
Assets classified as held for sale 95 111
Prepaid expenses and other current assets 107 110
Deferred income taxes 121 121
--------- ---------
Total Current Assets 900 730
Property, plant and equipment, net 3,128 3,037
Goodwill 493 485
Intangible assets 361 364
Investments in unconsolidated affiliates 229 229
Other assets 544 555
--------- ---------
Total Assets $5,655 $5,400
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other current liabilities $1,199 $1,166
Income taxes payable 268 208
Short-term borrowings 97 146
--------- ---------
Total Current Liabilities 1,564 1,520
Long-term debt 2,046 2,299
Other liabilities and deferred credits 1,042 987
--------- ---------
Total Liabilities 4,652 4,806
--------- ---------
Shareholders' Equity
Preferred stock, no par value, 250 shares
authorized; no shares issued - -
Common stock, no par value, 750 shares authorized;
294 shares issued in 2003 and 2002 1,024 1,046
Retained earnings (accumulated deficit) 200 (203)
Accumulated other comprehensive income (loss) (221) (249)
--------- ---------
Total Shareholders' Equity 1,003 594
--------- ---------
Total Liabilities and
Shareholders' Equity $5,655 $5,400
========= =========
See accompanying notes.
YUM! Brands, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in millions)
Year to date
---------------
9/6/03 9/7/02
------- -------
Cash Flows - Operating Activities
Net income $403 $411
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of accounting change, net of tax 1 -
Depreciation and amortization 273 244
Refranchising net loss (gain) 13 (9)
Wrench litigation 42 -
AmeriServe and other charges (credits) (3) (1)
Other liabilities and deferred credits (24) 13
Deferred income taxes 2 3
Other non-cash charges and credits, net 41 56
Changes in operating working capital, excluding effects
of acquisitions and
dispositions:
Accounts and notes receivable 3 34
Inventories (4) 12
Prepaid expenses and other current assets (17) 5
Accounts payable and other current liabilities (19) (26)
Income taxes payable 58 93
------- -------
Net change in operating working capital 21 118
------- -------
Net Cash Provided by Operating Activities 769 835
------- -------
Cash Flows - Investing Activities
Capital spending (358) (461)
Proceeds from refranchising of restaurants 11 67
Acquisition of Yorkshire Global Restaurants, Inc. - (275)
Acquisition of restaurants from franchisees (30) (13)
Short-term investments 3 (3)
Sales of property, plant and equipment 29 33
Other, net 9 2
------- -------
Net Cash Used In Investing Activities (336) (650)
------- -------
Cash Flows - Financing Activities
Proceeds from Senior Unsecured Notes - 398
Revolving Credit Facility activity
Three months or less, net (153) 79
Repayments of long-term debt (15) (498)
Short-term borrowings-three months or less, net (50) (25)
Repurchase shares of common stock (121) (161)
Employee stock option proceeds 70 110
Other, net - (15)
------- -------
Net Cash (Used In) Provided by Financing Activities (269) (112)
------- -------
Effect of Exchange Rates on Cash and Cash Equivalents 4 3
------- -------
Net Increase in Cash and Cash Equivalents 168 76
Cash and Cash Equivalents - Beginning of Period 130 110
------- -------
Cash and Cash Equivalents - End of Period $298 $186
======= =======
See accompanying notes.
Reconciliation of Non-GAAP Measurements to GAAP Results
(amounts in millions, except per share amounts)
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 on a basis before special items. Special items include the
GAAP income statement captions of Wrench litigation, AmeriServe and
other charges (credits) and the Cumulative effect of accounting
change, net of tax. These amounts are described in (d), (e) and (f) in
the accompanying notes.
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 that the presentation of earnings
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.
Quarter Year to date
--------------- ---------------
9/6/03 9/7/02 9/6/03 9/7/02
------- ------- ------- -------
Detail of Special Items
- --------------------------------------
Wrench litigation $(7) $- $(42) $-
AmeriServe and other (charges) credits 3 4 1 24
Cumulative effect of accounting change - - (2) -
------- ------- ------- -------
Total special items (4) 4 (43) 24
Tax on special items 1 (1) 16 (8)
------- ------- ------- -------
Special items, net of tax $(3) $3 $(27) $16
======= ======= ======= =======
Average shares outstanding 307 312 305 312
======= ======= ======= =======
Special items diluted EPS $(0.01) $0.01 $(0.09) $0.05
======= ======= ======= =======
Reconciliation of Earnings Before
Special Items to Net Income
- ---------------------------------
Earnings before special items $167 $144 $430 $395
Special items, net of tax (3) 3 (27) 16
------- ------- ------- -------
Net income $164 $147 $403 $411
======= ======= ======= =======
Reconciliation of EPS Before Special
Items to Reported EPS
- ------------------------------------
Diluted EPS before special items $0.54 $0.46 $1.41 $1.27
Special items diluted EPS (0.01) 0.01 (0.09) 0.05
------- ------- ------- -------
Reported diluted EPS $0.53 $0.47 $1.32 $1.32
======= ======= ======= =======
Reconciliation of Non-GAAP Measurements to GAAP Results
(amounts in millions)
The Company has also provided a non-GAAP measurement - total cash
generated - which is intended to measure cash flow inclusive of
certain items not contained in the GAAP measurement of net cash
provided by operating activities. This non-GAAP measurement is not
intended to replace presentations of cash flows in accordance with
GAAP. Rather, we use total cash generated to measure Company cash flow
internally, and the presentation of total cash generated provides
additional information to investors as to cash available to the
Company to fund capital spending, repurchases of shares of common
stock and debt repayments.
Reconciliation of Net Cash Provided by Operating
Activities to Total Cash Generated
- ------------------------------------------------
Quarter Year to date
--------- ------------
Net cash provided by operating activities $405 $769
Proceeds from refranchising of restaurants - 11
Sales of property, plant and equipment 9 29
Employee stock option proceeds 36 70
--------- ------------
Total cash generated $450 $879
========= ============
Notes to the Condensed Consolidated Statements
of Income and Cash Flows and Condensed Consolidated Balance Sheets
(amounts in millions, except per share amounts)
(a) Percentages may not recompute due to rounding.
(b) Other (income) expense includes the following:
Quarter Year to date
--------------- ---------------
9/6/03 9/7/02 9/6/03 9/7/02
------- ------- ------- -------
Store closure costs $- $4 $(2) $17
Store impairment charges 3 12 13 24
Equity income from investments in
unconsolidated affiliates (9) (6) (22) (19)
Foreign exchange net loss (gain) (1) (1) (2) (1)
------- ------- ------- -------
Other (income) expense $(7) $9 $(13) $21
======= ======= ======= =======
(c) Refranchising net loss (gain) includes write-downs of
approximately $5 million ($3 million after tax) and $15 million
($9 million after tax) for the quarter and year to date ended
September 6, 2003, respectively, to reflect estimates of the fair
value of an international market which is held for sale.
(d) The amounts recorded as Wrench litigation for the year to date
ended September 6, 2003 reflect the legal judgment against Taco
Bell Corp. on June 4, 2003 in Wrench v. Taco Bell Corp. and
related interest. The amount recorded as Wrench litigation for the
quarter ended September 6, 2003 reflects the interest accrued for
the passage of time during the quarter and an adjustment to
previously recorded interest necessary as a result of an amended
judgment on September 9, 2003.
(e) The amount recorded as AmeriServe and other charges (credits) for
the quarter ended September 6, 2003 primarily resulted from the
reversal of reserves associated with the settlement of certain
wage and hour litigation. The amount recorded as AmeriServe and
other charges (credits) for the year to date ended September 6,
2003 primarily resulted from recoveries related to the AmeriServe
bankruptcy reorganization process and the reversal of reserves
associated with the settlement of certain wage and hour
litigation, partially offset by costs to defend certain wage and
hour litigation and integration costs related to our acquisition
of Yorkshire Global Restaurants, Inc. ("YGR"). Amounts recorded as
AmeriServe and other charges (credits) for the quarter and year to
date ended September 7, 2002, which were referred to as unusual
items in 2002, primarily resulted from recoveries related to the
AmeriServe bankruptcy reorganization process partially offset by
costs to defend certain wage and hour litigation and integration
costs related to the acquisition of YGR.
(f) Effective December 29, 2002, the Company adopted Statement of
Financial Accounting Standards No. 143, "Accounting for Asset
Retirement Obligations" ("SFAS 143"). SFAS 143 addresses the
financial accounting and reporting for legal obligations
associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. As a result of obligations
under certain leases that are within the scope of SFAS 143, the
Company has recorded a cumulative effect adjustment of $2 million
($1 million after tax). The adoption of SFAS 143 did not
materially affect the results of our operations for the quarter or
year to date ended September 6, 2003, nor do we anticipate that it
will materially affect the results of operations in future
periods.
(g) System sales include the results of all restaurants regardless of
ownership, including company-owned, franchise, joint-venture and
license restaurants. Sales of franchise, joint-venture and license
restaurants generate franchise and license fees for us (typically
at a rate of 4% - 6% of sales). Franchise, joint-venture and
license restaurant sales are not included in the Company sales we
present on the Condensed Consolidated Statements of Income;
however, the fees are included in the Company's revenues. We
believe that system sales are useful to investors as a significant
indicator of our Company's market share relative to competitors
and the overall strength of our brands in the market place. System
sales were as follows:
% %
Change Change
Quarter B/(W) Year to date B/(W)
----------------- ------- ----------------- -------
9/6/03 9/7/02 9/6/03 9/7/02
-------- -------- -------- --------
United States
Company sales $1,199 $1,183 1 $3,518 $3,262 8
Estimated
franchisee,
licensee and
joint venture
sales 2,697 2,717 (1) 7,804 7,655 2
-------- -------- -------- --------
System sales 3,896 3,900 - 11,322 10,917 4
======== ======== ======== ========
International
Company sales $566 $522 8 $1,567 $1,440 9
Estimated
franchisee,
licensee and
joint venture
sales 1,702 1,508 13 4,878 4,274 14
-------- -------- -------- --------
System sales 2,268 2,030 12 6,445 5,714 13
======== ======== ======== ========
Worldwide system
sales $6,164 $5,930 4 $17,767 $16,631 7
======== ======== ======== ========
YUM! Brands, Inc.
Restaurant Units Activity Summary
For the Year to Date Ended September 6, 2003
Unconsolidated Total
Affili- Franchi- Excluding Total
Company ates(a) sees Licensees Licensees Units
------- ---------- -------- --------- --------- -------
Total U.S.
Beginning of
Year 5,193 4 13,663 18,860 2,266 21,126
New Builds 80 2 167 249 156 405
Acquisitions 106 - (108) (2) 2 -
Refranchising
& Licensing (26) - 26 - - -
Closures &
Divestitures (107) - (248) (355) (243) (598)
Other - - 1 1 - 1
------- ---------- -------- --------- --------- -------
End of Quarter 5,246 6 13,501 18,753 2,181 20,934
======= ========== ======== ========= ========= =======
% of Total 25% - 65% 90% 10% 100%
Total
International
Beginning of
Year 2,333 2,144 7,061 11,538 260 11,798
New Builds 183 88 345 616 10 626
Acquisitions 7 (4) (3) - - -
Refranchising
& Licensing (50) - 50 - - -
Closures &
Divestitures (52) (40) (211) (303) (10) (313)
Other - - (6) (6) - (6)
------- ---------- -------- --------- --------- -------
End of Quarter 2,421 2,188 7,236 11,845 260 12,105
======= ========== ======== ========= ========= =======
% of Total 20% 18% 60% 98% 2% 100%
Total System
Beginning of
Year 7,526 2,148 20,724 30,398 2,526 32,924
New Builds 263 90 512 865 166 1,031
Acquisitions 113 (4) (111) (2) 2 -
Refranchising
& Licensing (76) - 76 - - -
Closures &
Divestitures (159) (40) (459) (658) (253) (911)
Other - - (5) (5) - (5)
------- ---------- -------- --------- --------- -------
End of Quarter 7,667 2,194 20,737 30,598 2,441 33,039
======= ========== ======== ========= ========= =======
% of Total 23% 7% 63% 93% 7% 100%
(a) Total U.S. and Total System include 6 Yan Can units.
YUM! Brands, Inc.
Restaurant Units Activity Summary
For the Year to Date Ended September 6, 2003
United States
- ----------------------------------------------------------------------
Total
Excluding Total
Company Franchisees Licensees Licensees Units
------- ----------- --------- --------- ------
Pizza Hut U.S.
Beginning of Year 1,760 4,743 6,503 1,096 7,599
New Builds 25 67 92 116 208
Acquisitions 88 (88) - - -
Refranchising &
Licensing - - - - -
Closures &
Divestitures (35) (112) (147) (99) (246)
Other - - - - -
------- ----------- --------- --------- ------
End of Quarter 1,838 4,610 6,448 1,113 7,561
======= =========== ========= ========= ======
% of Total 24% 61% 85% 15% 100%
Taco Bell U.S.
Beginning of Year 1,284 3,759 5,043 1,122 6,165
New Builds 9 17 26 20 46
Acquisitions - (2) (2) 2 -
Refranchising &
Licensing - - - - -
Closures &
Divestitures (6) (34) (40) (142) (182)
Other - - - - -
------- ----------- --------- --------- ------
End of Quarter 1,287 3,740 5,027 1,002 6,029
======= =========== ========= ========= ======
% of Total 21% 62% 83% 17% 100%
KFC U.S.
Beginning of Year 1,284 4,140 5,424 48 5,472
New Builds 44 55 99 20 119
Acquisitions 18 (18) - - -
Refranchising &
Licensing (13) 13 - - -
Closures &
Divestitures (34) (42) (76) (2) (78)
Other - - - - -
------- ----------- --------- --------- ------
End of Quarter 1,299 4,148 5,447 66 5,513
======= =========== ========= ========= ======
% of Total 24% 75% 99% 1% 100%
Long John Silver's U.S.
Beginning of Year 741 480 1,221 - 1,221
New Builds 2 15 17 - 17
Acquisitions - - - - -
Refranchising &
Licensing (13) 13 - - -
Closures &
Divestitures (8) (11) (19) - (19)
Other 4 1 5 - 5
------- ----------- --------- --------- ------
End of Quarter 726 498 1,224 - 1,224
======= =========== ========= ========= ======
% of Total 59% 41% 100% - 100%
A&W U.S.
Beginning of Year 124 541 665 - 665
New Builds - 13 13 - 13
Acquisitions - - - - -
Refranchising &
Licensing - - - - -
Closures &
Divestitures (24) (49) (73) - (73)
Other (4) - (4) - (4)
------- ----------- --------- --------- ------
End of Quarter 96 505 601 - 601
======= =========== ========= ========= ======
% of Total 16% 84% 100% - 100%
YUM! Brands, Inc.
Restaurant Units Activity Summary
For the Year to Date Ended September 6, 2003
International
- ----------------------------------------------------------------------
Unconsoli- Total
dated Franchi- Excluding Total
Company Affiliates sees Licensees Licensees Units
------- ----------- -------- --------- --------- ------
Pizza Hut
International
Beginning of
Year 779 941 2,557 4,277 154 4,431
New Builds 44 33 137 214 4 218
Acquisitions 7 (3) (4) - - -
Refranchising
& Licensing (41) - 41 - - -
Closures &
Divestitures (31) (13) (96) (140) (5) (145)
Other - - (3) (3) 1 (2)
------- ----------- -------- --------- --------- ------
End of Quarter 758 958 2,632 4,348 154 4,502
======= =========== ======== ========= ========= ======
% of Total 17% 21% 59% 97% 3% 100%
Taco Bell
International
Beginning of
Year 38 28 138 204 63 267
New Builds 1 - 4 5 2 7
Acquisitions - - - - - -
Refranchising
& Licensing - - - - - -
Closures &
Divestitures (1) (3) - (4) (3) (7)
Other - - 4 4 (1) 3
------- ----------- -------- --------- --------- ------
End of Quarter 38 25 146 209 61 270
======= =========== ======== ========= ========= ======
% of Total 14% 9% 54% 77% 23% 100%
KFC
International
Beginning of
Year 1,516 1,175 4,156 6,847 43 6,890
New Builds 138 55 182 375 2 377
Acquisitions - (1) 1 - - -
Refranchising
& Licensing (9) - 9 - - -
Closures &
Divestitures (20) (24) (83) (127) (2) (129)
Other - - (7) (7) - (7)
------- ----------- -------- --------- --------- ------
End of Quarter 1,625 1,205 4,258 7,088 43 7,131
======= =========== ======== ========= ========= ======
% of Total 23% 17% 59% 99% 1% 100%
Long John
Silver's
International
Beginning of
Year - - 28 28 - 28
New Builds - - 1 1 1 2
Acquisitions - - - - - -
Refranchising
& Licensing - - - - - -
Closures &
Divestitures - - (1) (1) - (1)
Other - - - - - -
------- ----------- -------- --------- --------- ------
End of Quarter - - 28 28 1 29
======= =========== ======== ========= ========= ======
% of Total - - 97% 97% 3% 100%
A&W International
Beginning of Year - - 182 182 - 182
New Builds - - 21 21 1 22
Acquisitions - - - - - -
Refranchising
& Licensing - - - - - -
Closures &
Divestitures - - (31) (31) - (31)
Other - - - - - -
------- ----------- -------- --------- --------- ------
End of Quarter - - 172 172 1 173
======= =========== ======== ========= ========= ======
% of Total - - 99% 99% 1% 100%
YUM! Brands, Inc.
Systemwide Multibrand Restaurants
For the Year to Date Ended September 6, 2003
United States
----------------------------------------
Multibrand Restaurants
in Operation at 9/6/03
------------------------
Gross Additions
Year to Date
9/6/03 Company Franchise Total
--------------- ------- --------- ------
KFC
Taco Bell 28 188 475 663
Pizza Hut 7 115 42 157
A&W 66 101 126 227
Taco Bell/Pizza Hut 3 n 1 2 21 25 46
Long John Silver's 23 19 16 35
Wing Works 2 26 - 26
--------------- ------- --------- ------
128 470 684 1,154
Taco Bell
Pizza Hut 14 313 279 592
Long John Silver's 18 19 6 25
Backyard Burgers 5 8 - 8
A&W 2 2 - 2
--------------- ------- --------- ------
39 342 285 627
Pizza Hut
KFC - - 1 1
Taco Bell 1 - 6 6
Wing Works 2 3 - 3
Pasta Bravo 2 2 1 3
Wing Streets 29 29 - 29
--------------- ------- --------- ------
34 34 8 42
Long John Silver's
A&W 33 110 85 195
--------------- ------- --------- ------
Total 234 956 1,062 2,018
=============== ======= ========= ======
Multibrand conversions increase the sales and points of distribution
for the second brand added to a restaurant but do not result in an
additional unit count. Though no additional unit counts are realized,
these conversions drive increases in same-store sales and result in
upgraded, new-image restaurants. Similarly, a new multibrand
restaurant, while increasing sales and points of distribution for two
brands, results in just one additional unit count.
YUM! Brands, Inc.
Systemwide Multibrand Restaurants
For the Year to Date Ended September 6, 2003
International
----------------------------------------
Multibrand Restaurants
in Operation at 9/6/03
-----------------------
Gross Additions
Year to Date
9/6/03 Company Franchise Total
---------------- ------- --------- -----
KFC
Taco Bell 6 10 46 56
Pizza Hut 10 20 67 87
A&W 3 3 - 3
Taco Bell/Pizza Hut 3 n 1 - 2 4 6
Long John Silver's - - - -
Wing Works - - - -
---------------- ------- --------- -----
19 35 117 152
Taco Bell
Pizza Hut 12 11 22 33
Long John Silver's - - 1 1
Backyard Burgers - - - -
---------------- ------- --------- -----
12 11 23 34
Pizza Hut
KFC - - - -
Taco Bell - - - -
Wing Works - - - -
Pasta Bravo - - - -
---------------- ------- --------- -----
- - - -
Long John Silver's
A&W - - 1 1
---------------- ------- --------- -----
Total 31 46 141 187
================ ======= ========= =====
YUM! Brands, Inc.
Systemwide Multibrand Restaurants
For the Year to Date Ended September 6, 2003
Worldwide
----------------------------------------
Multibrand Restaurants
in Operation at 9/6/03
------------------------
Gross Additions
Year to Date
9/6/03 Company Franchise Total
--------------- ------- --------- ------
KFC
Taco Bell 34 198 521 719
Pizza Hut 17 135 109 244
A&W 69 104 126 230
Taco Bell/Pizza Hut 3 n 1 2 23 29 52
Long John Silver's 23 19 16 35
Wing Works 2 26 - 26
--------------- ------- --------- ------
147 505 801 1,306
Taco Bell
Pizza Hut 26 324 301 625
Long John Silver's 18 19 7 26
Backyard Burgers 5 8 - 8
A&W 2 2 - 2
--------------- ------- --------- ------
51 353 308 661
Pizza Hut
KFC - - 1 1
Taco Bell 1 - 6 6
Wing Works 2 3 - 3
Pasta Bravo 2 2 1 3
Wing Streets 29 29 - 29
--------------- ------- --------- ------
34 34 8 42
Long John Silver's
A&W 33 110 86 196
--------------- ------- --------- ------
Total 265 1,002 1,203 2,205
=============== ======= ========= ======
CONTACT: Yum! Brands, Inc., Louisville
Analysts:
Tim Jerzyk, 888-298-6986
Vice President Investor Relations
or
Individual shareholders:
Lynn Schweinfurth, 888-298-6986
Director Investor Relations
or
Media:
Amy Sherwood, 502-874-8200
Vice President Public Relations