Yum Brands : Oct 5, 2016 – Yum! Brands Reports Third-Quarter GAAP Operating Profit Growth of 8%; Delivers Core Operating Profit Growth of 11%; Raises Full-Year Core Operating Profit Growth Guidance to At Least 15%

NEWS ‌‌‌‌‌‌‌‌‌‌‌‌‌

Keith Siegner

Vice President, Investor Relations & Corporate Strategy

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

THIRD-QUARTER HIGHLIGHTS

• KFC Division same-store sales increased 4%, with U.S. same-store sales growing 6%; system sales increased 7%.

• Taco Bell Division same-store sales increased 3% and system sales increased 5%, while achieving a 21.7% restaurant margin.

• Worldwide core operating profit grew 11%, with the brand divisions excluding China delivering 11% core operating profit growth in aggregate, ahead of expectations.

• China core operating profit grew 14%.

• Opened 475 new restaurants worldwide; 78% of international development occurred in emerging markets.

• On track to finalize China separation with Yum China Holdings, Inc. expected to begin trading on November 1, 2016 on the NYSE under the ticker symbol "YUMC."

• Foreign currency translation negatively impacted operating profit by $34 million.

Third Quarter Year-to-Date

1 See Reconciliation of Non-GAAP Measurements to GAAP Results for further detail of Special Items. Special Items in 2016 are primarily related to a U.S. tax benefit related to previously recognized Little Sheep impairment losses, gains associated with Pizza Hut and Taco Bell U.S. refranchising and costs associated with the planned separation of our China business, U.S. voluntary retirement packages and the agreement reached in 2015 with KFC U.S. franchisees. Special Items in 2015 are primarily related to a non-cash charge associated with refranchising our Mexico business and costs associated with the agreement reached in 2015 with KFC U.S. franchisees, partially offset by U.S. refranchising gains.

Note: All comparisons are versus the same period a year ago. 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.

Full-year GAAP operating profit growth guidance is not provided due to our inability to forecast when gains and losses related to refranchising transactions classified as Special Items will occur, as the timing of these transactions is often outside our control, and the resulting gains and losses are dependent upon future market conditions. 2016 core operating profit growth guidance assumes the China business remains part of the Company through the end of 2016.

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 "Yum! Brands delivered third-quarter core operating profit growth of 11% and EPS growth, excluding Special Items, of 9%. For the full year, we are raising our core operating profit growth guidance from at least 14% to at least 15%.

In the third quarter, I was pleased with both KFC's and Taco Bell's performance, each of which returned to a focus on core menu items, but in ways that were distinctive, disruptive and relevant. Both brands had accelerating same-store sales growth, despite sluggish QSR industry trends, especially in the U.S. Excluding China, our brand divisions in aggregate delivered core operating profit growth of 11%, which was ahead of our expectations. System sales for the brand divisions excluding China grew 5% in constant currency, driven by KFC where system sales grew 7% with international emerging markets up an impressive 12%. We are excited about the momentum we are seeing in our base business as we embark on the next chapter of growth at our company.

Sales were off to a good start in the first six weeks of the quarter in the China Division. However, anticipated tougher laps in the second half of the third quarter were compounded by an international court ruling on claims regarding the South China Sea, which triggered a series of regional protests and negative sentiment against a few international companies with well-known Western brands. If not for this event, we believe the China Division would have delivered its fifth consecutive quarter of positive same-store sales growth. The good news is the incident was short- lived and the sales impact continued to dissipate through August and September. Despite the protests, Pizza Hut Casual Dining continued its trend of quarterly sequential improvement.

2016 marks the beginning of a massive transformation for Yum! Brands. Step one is the formal separation of our China business, which will become one of China's largest publicly-traded retail companies with meaningful growth opportunities supported by U.S. governance. New Yum! Brands will become a unique and focused world-class franchisor with consistent, stable cash flow generation and an efficient cost structure that encourages growth. We look forward to sharing the details of our strategic plans for both companies at our New York investor conference on Tuesday, October 11."

New Global Yum! Core Operating Profit Growth

After the spin-off of our China business, we will reclassify China Division's historical results and related tax expense, including the first ten months of 2016, to Discontinued Operations within our Income Statement. The China Division's results presented in Discontinued Operations will include an incremental license fee expense similar to what will be paid by China to Yum! going forward. Likewise, Yum!'s historical results for our KFC and Pizza Hut Divisions, including the first ten months of 2016, will include incremental license fee income from our China business such that recast total net income, including Discontinued Operations, is the same as previously reported results.

While we expect to spin-off our China business on October 31, 2016, our operating profit growth targets assume China will remain part of Yum! through the end of 2016.

CHINA DIVISION

• China Division system sales increased 3%, excluding foreign currency translation.

  • Same-store sales decreased 1%, with declines of 1% at KFC and 4% at Pizza Hut Casual Dining.

• China Division opened 133 new units during the quarter.

1 Total includes East Dawning and Little Sheep units.

2 Represents year-over-year change.

• Operating profit increased as a result of recent value-added tax reform in China and new-unit development, partially offset by higher labor costs, increased G&A and sales deleverage.

• Foreign currency translation negatively impacted operating profit by $23 million.

• Consistent with prior years, China Division's third quarter includes June, July and August results.

  KFC DIVISION

  2016		Third Quarter %/ppts Change 2015 Reported Ex F/X			2016	Year-to-Date %/ppts Change 2015 Reported Ex F/X
  Restaurants	15,065 14,694		+3	N/A	15,065	14,694	+3	N/A
  System Sales Growth	+3	+7	+1			+6
  Same-Store Sales Growth (%)	+4	+3	NM	NM	+2	+3	NM	NM
  Franchise & License Fees ($MM)	202	195	+4	+8	591	584	+1	+6
  Restaurant Margin (%)	14.5	12.9	1.6	1.6	14.6	13.9	0.7	0.6
  Operating Profit ($MM)	160	144	+11	+19	469	459	+2	+9
  Operating Margin (%)	22.2	20.0	2.2	2.3	22.8	21.8	1.0	1.0

• KFC Division system sales increased 7%, excluding foreign currency translation.

  Third Quarter (% Change)
  Int'l Emerging Markets Int'l Developed Markets U.S.
  System Sales Growth (Ex F/X) Same-Store Sales Growth	+12 +5	+4 +1	+4 +6

• KFC Division opened 138 new international restaurants in 42 countries, including 96 units in emerging markets.

• Operating margin increased 2.2 percentage points driven by same-store sales growth.

• Foreign currency translation negatively impacted operating profit by $11 million, as approximately 90% of division profits are generated outside the U.S.

1 See website www.yum.com/investors for a list of the countries within each of the markets.

2 Reflects Full Year 2015.