Yum! Brands Reports Fourth-Quarter Results; Industry Record Full-Year 3,057 Net-New Units; Fourth-Quarter System Sales Growth of 9% with Over $6 Billion in Digital Sales; Full-Year System Sales Growth of 13% and Record Digital Sales of $22 Billion

LOUISVILLE, Ky.–(BUSINESS WIRE)–Yum! Brands, Inc. (NYSE: YUM) today reported results for the fourth-quarter and year ended December 31, 2021. Fourth-quarter GAAP EPS was $1.11, an increase of 3%. Full-year GAAP EPS was $5.21, an increase of 77%. Fourth-quarter EPS excluding Special Items was $1.02, a decrease of (12)%. Full-year EPS excluding Special Items was $4.46, an increase of 23%.

DAVID GIBBS & CHRIS TURNER COMMENTS

David Gibbs, CEO, said “We opened an astounding 4,180 gross units in 2021, marking the strongest growth year in Yum!’s history and setting a restaurant industry record for unit development. We also reached new heights in digital sales that topped $22 billion. I’m confident and energized heading into 2022, which marks Yum!’s 25th anniversary, as we continue to build the world’s most loved and trusted brands while delivering lasting value for our stakeholders.”

Chris Turner, CFO, said “Our fiscal 2021 system sales growth of 13%, with 10% same store sales and 6% unit growth, illustrates the health of our global system – iconic Brands, capable, committed, and well-capitalized franchise partners and strong unit economics. During the quarter, system sales grew 9% including 5% same store sales growth, or 4% on a 2-year basis. We remain focused on fueling growth, with confidence in our Recipe for Growth and Good strategies, and delivering on our long-term growth algorithm in fiscal 2022 and beyond.”

SUMMARY FINANCIAL TABLE

	Fourth-Quarter			Full-Year
	2021	2020	% Change	2021	2020	% Change
GAAP EPS	$1.11	$1.08	+3	$5.21	$2.94	+77
Special Items EPS1	$0.09	$(0.07)	NM	$0.75	$(0.68)	NM
EPS Excluding Special Items	$1.02	$1.15	(12)	$4.46	$3.62	+23
1 See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Special Items.
All comparisons are versus the same period a year ago.
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.
Digital sales includes all transactions where consumers at system restaurants utilize ordering interaction that is primarily facilitated by automated technology.

FOURTH-QUARTER HIGHLIGHTS

• Worldwide system sales grew 9% excluding foreign currency translation, with KFC at 10%, Taco Bell at 11%, and Pizza Hut at 4%.
• We added 1,678 gross units during the fourth quarter.
• We repurchased 5.6 million shares totaling $720 million at an average price per share of $128.
• Foreign currency translation unfavorably impacted divisional operating profit by $1 million.

	% Change
	System Sales Ex F/X	Same-Store Sales	Units	GAAP Operating Profit	Core Operating Profit1
KFC Division	+10	+5	+8	+11	+12
Taco Bell Division	+11	+8	+5	(7)	(7)
Pizza Hut Division	+4	+3	+4	(1)	(1)
Worldwide	+9	+5	+6	+4	(1)

FULL-YEAR HIGHLIGHTS

• Worldwide system sales grew 13% excluding foreign currency translation, with KFC at 16%, Taco Bell at 13%, and Pizza Hut at 6%.
• We added a record 4,180 gross units during the year contributing to 6% unit growth.
• We repurchased 13 million shares totaling $1.6 billion at an average price per share of $122.
• Foreign currency translation favorably impacted divisional operating profit by $54 million.

	% Change
	System Sales Ex F/X	Same-Store Sales	Units	GAAP Operating Profit	Core Operating Profit1
KFC Division	+16	+11	+8	+33	+29
Taco Bell Division	+13	+11	+5	+9	+9
Pizza Hut Division	+6	+7	+4	+16	+13
Worldwide	+13	+10	+6	+42	+18
1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Core Operating Profit and Special Items.

KFC DIVISION

	Fourth-Quarter				Full-Year
			%/ppts Change				%/ppts Change
	2021	2020	Reported	Ex F/X	2021	2020	Reported	Ex F/X
Restaurants	26,934	25,000	+8	NA	26,934	25,000	+8	NA
System Sales ($MM)	8,576	7,805	+10	+10	31,365	26,289	+19	+16
Same-Store Sales Growth (%)	+5	(2)	NM	NM	+11	(9)	NM	NM
Franchise & Property Revenues ($MM)	433	389	+12	+12	1,557	1,295	+20	+17
Operating Profit ($MM)	298	267	+11	+12	1,230	922	+33	+29
Operating Margin (%)	37.5	37.6	(0.1)	0.0	44.0	40.6	3.4	3.5

	Fourth-Quarter (% Change)		Full-Year (% Change)
	International	U.S.	International	U.S.
System Sales Growth Ex F/X	+12	+4	+17	+7
Same-Store Sales Growth	+6	+4	+12	+8

• KFC Division opened 904 gross new restaurants during the quarter.
  • For the year, KFC Division opened 2,471 gross new restaurants in 105 countries.
• Operating margin was flat for the quarter as higher general and administrative expenses and higher company restaurant expenses were offset by system sales growth.
  • For the year, operating margin increased 3.5 percentage points driven by system sales growth and bad debt recoveries, partially offset by higher general and administrative expenses.
• Foreign currency translation unfavorably impacted operating profit by $1 million for the quarter and favorably impacted operating profit by $45 million for the year.
• For the division, same-store sales on a 2-year basis grew 3% for the quarter and 2% for the year.
  • For KFC International, same-store sales on a 2-year basis grew 2% for the quarter and declined 1% for the year.
  • For KFC U.S., same-store sales on a 2-year basis grew 12% for the quarter and 13% for the year.

KFC Markets1	Percent of KFC System Sales2	System Sales Growth Ex F/X
		Fourth-Quarter (% Change)	Full-Year (% Change)
China	26%	(3)	+8
United States	17%	+4	+7
Asia	11%	+7	+6
Russia, Central & Eastern Europe	8%	+33	+35
Australia	7%	+6	+9
United Kingdom	7%	+12	+38
Western Europe	6%	+30	+26
Latin America	5%	+31	+32
Africa	4%	+20	+33
Middle East / Turkey / North Africa	4%	+32	+40
Canada	2%	+8	+9
Thailand	2%	+6	(6)
India	1%	+60	+68
1Refer to investors.yum.com under Financial Reports for a list of the countries within each of the markets. 2Reflects Full Year 2021.

TACO BELL DIVISION

	Fourth-Quarter				Full-Year
			%/ppts Change				%/ppts Change
	2021	2020	Reported	Ex F/X	2021	2020	Reported	Ex F/X
Restaurants	7,791	7,427	+5	NA	7,791	7,427	+5	NA
System Sales ($MM)	4,068	3,671	+11	+11	13,280	11,745	+13	+13
Same-Store Sales Growth (%)	+8	+1	NM	NM	+11	(1)	NM	NM
Franchise & Property Revenues ($MM)	224	202	+11	+11	742	662	+12	+12
Operating Profit ($MM)	198	212	(7)	(7)	758	696	+9	+9
Operating Margin (%)	28.9	33.8	(4.9)	(4.9)	33.9	34.3	(0.4)	(0.4)

• Taco Bell Division opened 195 gross new restaurants during the quarter.
  • For the year, Taco Bell Division opened 433 gross new restaurants in 27 countries.
• Company restaurant margin percentages were 22.6% for the quarter and 23.9% for the year.
• Operating margin decreased 4.9 percentage points for the quarter and less than 1 percentage point for the year driven by higher company restaurant expenses and higher general and administrative expenses, partially offset by system sales growth.
• For the division, same-store sales on a 2-year basis grew 9% for the quarter and 10% for the year.
• Spain became the first Taco Bell International market to surpass 100 units.

PIZZA HUT DIVISION

	Fourth-Quarter				Full-Year
			%/ppts Change				%/ppts Change
	2021	2020	Reported	Ex F/X	2021	2020	Reported	Ex F/X
Restaurants	18,381	17,639	+4	NA	18,381	17,639	+4	NA
System Sales ($MM)	3,546	3,407	+4	+4	12,955	11,955	+8	+6
Same-Store Sales Growth (%)	+3	(1)	NM	NM	+7	(6)	NM	NM
Franchise & Property Revenues ($MM)	162	159	+3	+3	597	552	+8	+6
Operating Profit ($MM)	81	83	(1)	(1)	387	335	+16	+13
Operating Margin (%)	29.2	28.7	0.5	0.6	37.7	33.5	4.2	4.0

	Fourth-Quarter (% Change)		Full-Year (% Change)
	International	U.S.	International	U.S.
System Sales Growth Ex F/X	+8	Even	+10	+1
Same-Store Sales Growth	+4	+1	+8	+5

• Pizza Hut Division opened 571 gross new restaurants during the quarter.
  • For the year, Pizza Hut Division opened 1,250 gross new restaurants in 66 countries.
• Operating margin increased less than 1 percentage point for the quarter primarily driven by system sales growth, partially offset by higher Franchise advertising and other services expense primarily related to digital and technology expenses.
  • For the year, operating margin increased 4 percentage points driven by system sales growth and lower general and administrative expenses, partially offset by higher Franchise advertising and other services expense primarily related to digital and technology expenses.
• Foreign currency translation had less than $1 million unfavorable impact on operating profit for the quarter and favorably impacted operating profit $8 million for the year.
• For the division, same-store sales on a 2-year basis grew 2% for the quarter and 1% for the year.
  • For Pizza Hut International, same-store sales on a 2-year basis declined 3% for the quarter and declined 5% for the year.
  • For Pizza Hut U.S., same-store sales on a 2-year basis grew 10% for the quarter and 9% for the year.

Pizza Hut Markets1	Percent of Pizza Hut System Sales2	System Sales Growth Ex F/X
		Fourth-Quarter (% Change)	Full-Year (% Change)
United States	43%	Even	+1
China	16%	(2)	+14
Asia	14%	+2	+1
Latin America / Spain / Portugal	10%	+14	+15
Europe (excluding Spain & Portugal)	8%	+23	+8
Middle East / Turkey / North Africa	4%	+3	+9
Canada	3%	+10	+12
India	1%	+57	+59
Africa	<1%	+14	+32
1Refer to investors.yum.com under Financial Reports for a list of the countries within each of the markets. 2Reflects Full Year 2021.

THE HABIT BURGER GRILL DIVISION

• The Habit Burger Grill Division grew system sales 20% for the quarter and 24% for the year.
• The Habit Burger Grill Division same-store sales increased 11% for the quarter and 16% for the year.
  • For the division, same-store sales on a 2-year basis grew 5% for the quarter and 3% for the year.
• The Habit Burger Grill Division opened 8 gross new restaurants during the quarter.
  • For the year, The Habit Burger Grill Division opened 26 gross new restaurants.

OTHER ITEMS

• Same-store sales growth on a 2-year basis is calculated using the geometric method as follows: (1 + Q4 2020 reported same-store sales growth) * (1 + Q4 2021 reported same-store sales growth) – 1 and (1 + FY 2020 reported same-store sales growth) * (1 + FY 2021 reported same-store sales growth) – 1.
• Disclosures pertaining to outstanding debt in our Restricted Group capital structure will be provided at the time of the filing of the 2021 Form 10-K.

CONFERENCE CALL

Yum! Brands, Inc. will host a conference call to review the company’s financial performance and strategies at 8:15 a.m. Eastern Time Wednesday, February 9, 2022. The number is 877/871-3172 in the U.S., 1-877-504-2267 in Canada and 1-412-902-6603 for international callers, conference ID 2088582.

The call will be available for playback beginning at 10:00 a.m. Eastern Time February 9, 2022 through February 16, 2022. To access the playback, dial 877/344-7529 in the U.S., 855/669-9658 in Canada, and 412/317-0088 internationally, conference ID 2558485.

The webcast and the playback can be accessed via the website by visiting Yum! Brands’ website, investors.yum.com/events-and-presentations and selecting “Q4 2021 Earnings Conference Call.”

ADDITIONAL INFORMATION ONLINE

Quarter end dates for each division, restaurant count details, definitions of terms and Restricted Group financial information are available at investors.yum.com. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures are included within this release.

FORWARD-LOOKING STATEMENTS

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,” “seek,” “project,” “model,” “ongoing,” “will,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on and reflect our current expectations, estimates, assumptions and/or projections, our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance or capital structure of Yum! Brands, will prove to be correct or that any of our expectations, estimates or projections will be achieved.

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: the severity and duration of the COVID-19 pandemic; food safety and food borne-illness issues; the occurrence of a significant health epidemic or other catastrophic event; the success of our franchisees and licensees; our significant exposure to the Chinese market; changes in economic and political conditions in, and other risks associated with, countries and territories outside of the U.S. where we operate; changes in currency exchange rates; our ability to protect the integrity and security of personal information of our customers and employees, and other cybersecurity risks; our ability to successfully implement technology initiatives; our increasing dependence on multiple digital commerce platforms; the impact of social media; our ability to secure and maintain distribution and adequate supply to our restaurants; the loss of key personnel, or labor shortages or difficulty finding qualified employees; the success of our development strategy, including in emerging markets; changes in commodity, labor and other operating costs; the impact of climate change and other environmental and sustainability matters; pending or future litigation and legal claims or proceedings; changes in or noncompliance with government regulations, including data privacy laws, labor standards, and anti-bribery or anti-corruption laws; tax matters, including changes in tax laws or disagreements with taxing authorities; consumer preferences and perceptions of our brands and corporate reputation; failure to protect our service marks or other intellectual property; changes in consumer discretionary spending and general economic conditions; competition within the retail food industry; not realizing the anticipated benefits from past or potential future acquisitions, investments or other strategic transactions; and risks relating to our significant amount of indebtedness. 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.

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. 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 most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q) for additional detail about factors that could affect our financial and other results.

Yum! Brands, Inc., based in Louisville, Kentucky, has over 53,000 restaurants in more than 155 countries and territories, operating the Company’s brands – KFC, Pizza Hut and Taco Bell – global leaders of the chicken, pizza and Mexican-style food categories. The Company’s family of brands also includes The Habit Burger Grill, a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2021, Yum! Brands was named to the Dow Jones Sustainability Index North America and was ranked on Newsweek’s list of America’s Most Responsible Companies.

YUM! Brands, Inc. Consolidated Summary of Results (amounts in millions, except per share amounts) (unaudited)
	Quarter ended								% Change B/(W)		Year ended								% Change B/(W)
	12/31/21				12/31/20						12/31/21				12/31/20
Revenues
Company sales	$	597			$	566			5		$	2,106			$	1,810			16
Franchise and property revenues		820				750			10			2,900				2,510			16
Franchise contributions for advertising and other services		473				427			10			1,578				1,332			18
Total revenues		1,890				1,743			8			6,584				5,652			16
Costs and Expenses, Net
Company restaurant expenses		495				460			(8)			1,725				1,506			(15)
General and administrative expenses		371				340			(9)			1,060				1,064			—
Franchise and property expenses		36				38			—			117				145			18
Franchise advertising and other services expense		486				427			(14)			1,576				1,314			(20)
Refranchising (gain) loss		(14	)			(4	)		246			(35	)			(34	)		2
Other (income) expense		14				—			NM			2				154			NM
Total costs and expenses, net		1,388				1,261			(10)			4,445				4,149			(7)
Operating Profit		502				482			4			2,139				1,503			42
Investment (income) expense, net		(34	)			(7	)		396			(86	)			(74	)		16
Other pension (income) expense		1				5			79			7				14			48
Interest expense, net		128				132			3			544				543			—
Income before income taxes		407				352			16			1,674				1,020			64
Income tax provision		77				20			(274)			99				116			15
Net income	$	330			$	332			—		$	1,575			$	904			74
Basic EPS
EPS	$	1.13			$	1.10			3		$	5.30			$	2.99			78
Average shares outstanding		293				302			3			297				302			2
Diluted EPS
EPS	$	1.11			$	1.08			3		$	5.21			$	2.94			77
Average shares outstanding		298				307			3			302				307			2
Dividends declared per common share	$	0.50			$	0.47					$	2.00			$	1.88
See accompanying notes. Percentages may not recompute due to rounding.

YUM! Brands, Inc. KFC DIVISION Operating Results (amounts in millions) (unaudited)
	Quarter ended								% Change B/(W)		Year ended								% Change B/(W)
	12/31/21				12/31/20						12/31/21				12/31/20
Company sales	$	173			$	160			8		$	596			$	506			18
Franchise and property revenues		433				389			12			1,557				1,295			20
Franchise contributions for advertising and other services		188				162			16			640				471			36
Total revenues		794				711			12			2,793				2,272			23
Company restaurant expenses		144				132			(10)			490				439			(12)
General and administrative expenses		138				122			(13)			377				346			(9)
Franchise and property expenses		25				22			(17)			74				91			18
Franchise advertising and other services expenses		189				164			(16)			627				465			(35)
Other (income) expense		—				4			NM			(5	)			9			NM
Total costs and expenses, net		496				444			(12)			1,563				1,350			(16)
Operating Profit	$	298			$	267			11		$	1,230			$	922			33
Company restaurant margin %1		16.3	%			17.5	%		(1.2) ppts.			17.7	%			13.2	%		4.5 ppts.
Operating margin		37.5	%			37.6	%		(0.1) ppts.			44.0	%			40.6	%		3.4 ppts.
See accompanying notes. Percentages may not recompute due to rounding.   1See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Company restaurant margin %.

YUM! Brands, Inc. TACO BELL DIVISION Operating Results (amounts in millions) (unaudited)
	Quarter ended								% Change B/(W)		Year ended								% Change B/(W)
	12/31/21				12/31/20						12/31/21				12/31/20
Company sales	$	288			$	272			6		$	944			$	882			7
Franchise and property revenues		224				202			11			742				662			12
Franchise contributions for advertising and other services		172				154			12			552				487			14
Total revenues		684				628			9			2,238				2,031			10
Company restaurant expenses		224				199			(11)			719				657			(9)
General and administrative expenses		70				50			(43)			174				158			(11)
Franchise and property expenses		10				9			(25)			33				33			(3)
Franchise advertising and other services expenses		176				154			(15)			553				484			(14)
Other (income) expense		6				4			NM			1				3			NM
Total costs and expenses, net		486				416			(17)			1,480				1,335			(11)
Operating Profit	$	198			$	212			(7)		$	758			$	696			9
Company restaurant margin %1		22.6	%			26.6	%		(4.0) ppts.			23.9	%			25.5	%		(1.6) ppts.
Operating margin		28.9	%			33.8	%		(4.9) ppts.			33.9	%			34.3	%		(0.4) ppts.
See accompanying notes. Percentages may not recompute due to rounding.   1See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Company restaurant margin %.

YUM! Brands, Inc. PIZZA HUT DIVISION Operating Results (amounts in millions) (unaudited)
	Quarter ended								% Change B/(W)		Year ended								% Change B/(W)
	12/31/21				12/31/20						12/31/21				12/31/20
Company sales	$	7			$	19			(66)		$	46			$	76			(40)
Franchise and property revenues		162				159			3			597				552			8
Franchise contributions for advertising and other services		112				111			—			385				374			3
Total revenues		281				289			(3)			1,028				1,002			3
Company restaurant expenses		7				18			65			43				73			41
General and administrative expenses		73				74			1			201				215			6
Franchise and property expenses		2				6			67			11				17			37
Franchise advertising and other services expenses		120				109			(9)			395				365			(8)
Other (income) expense		(2	)			(1	)		NM			(9	)			(3	)		NM
Total costs and expenses, net		200				206			4			641				667			4
Operating Profit	$	81			$	83			(1)		$	387			$	335			16
Company restaurant margin %1		6.1	%			10.0	%		(3.9) ppts.			6.8	%			5.1	%		1.7 ppts.
Operating margin		29.2	%			28.7	%		0.5 ppts.			37.7	%			33.5	%		4.2 ppts.
See accompanying notes. Percentages may not recompute due to rounding.   1See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Company restaurant margin %.

YUM! Brands, Inc. Consolidated Balance Sheets (amounts in millions)
	(unaudited)
	12/31/21				12/31/20
ASSETS
Current Assets
Cash and cash equivalents	$	486			$	730
Accounts and notes receivable, less allowance: $36 in 2021 and $45 in 2020		596				534
Prepaid expenses and other current assets		450				425
Total Current Assets		1,532				1,689
Property, plant and equipment, net of accumulated depreciation of $1,270 in 2021 and $1,230 in 2020		1,207				1,235
Goodwill		657				597
Intangible assets, net		359				343
Other assets		1,487				1,435
Deferred income taxes		724				553
Total Assets	$	5,966			$	5,852
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and other current liabilities	$	1,334			$	1,189
Income taxes payable		13				33
Short-term borrowings		68				453
Total Current Liabilities		1,415				1,675
Long-term debt		11,178				10,272
Other liabilities and deferred credits		1,746				1,796
Total Liabilities		14,339				13,743
Shareholders’ Deficit
Common Stock, no par value, 750 shares authorized; 289 shares and 300 shares issued in 2021 and 2020, respectively		—				—
Accumulated deficit		(8,048	)			(7,480	)
Accumulated other comprehensive loss		(325	)			(411	)
Total Shareholders’ Deficit		(8,373	)			(7,891	)
Total Liabilities and Shareholders’ Deficit	$	5,966			$	5,852
See accompanying notes.

Contacts

Analysts are invited to contact:

Jodi Dyer, Vice President, Investor Relations, at 888/298-6986

Members of the media are invited to contact:

Virginia Ferguson, Vice President, Public Relations, at 502/874-8200

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