NOT YOUR ORDINARY RESTAURANT COMPANY David C

NOT YOUR ORDINARY RESTAURANT COMPANY David C. Novak Chairman & Chief Executive Officer

December 7, 2004 The Dynasty Model

OurOur PassionPassion OurOur FormulaFormula forfor SuccessSuccess Customer Mania . . . People Capability first . . . act as ONE SYSTEM to put a YUM satisfied customers and profitability follow on customers’ faces around the world HowHow WeWe LeadLead 1. Be a Customer Maniac 2. Know and Drive the Business 3. Build and Align Teams

HowHow WeWe WinWin

Differentiate Lead the way Drive explosive Convert Run Great the brands in in global cash flow Restaurants everything we multibranding expansion into high value do innovation

HowHow WeWe WorkWork TogetherTogether Our HWWT Leadership Principles Our Franchise Partnership Pact YUM! — Track Record of Performance

ShareholderShareholder CommitmentCommitment ...... AtAt LeastLeast +10%+10% AnnualAnnual EPSEPS GrowthGrowth

2002 +13%

2003 +13%

2004 +14% Strong Cash Flow & High ROIC

Cash Flow from Operating Activities ($ million) +16% 5-Year 1,185 r CAGR

832

565

'99 ’01 ’04 F ROIC 17% 18% 18% YUM! 2004 F

; Met our EPS commitment of at least +10%. . . Again

; Record cash from operating activities

; 4th consecutive year to open 1,000+ international new restaurants

; . . . Includes industry-leading restaurant openings in China, 325+

; 3% Global same-store-sales growth, 3% U.S. same-store-sales growth

; Record share buy back, $575 million

; Meaningful dividend initiated

; Early redemption of $350 million, May 2005 bonds

; Investment-grade balance sheet YUM! — How We Are Organized

2004 F Chairman, CEO

NEW Long John Silver’s/ China International Taco Bell Pizza Hut KFC A&W Division Division ------Multibranding 5% 5% (2)% SSS 500+ $200+ million +18% SSS Growth Growth, Multibrand Op Profit Profit SSS Growth Building a Additions 350+ New Units Growth Turnaround 700+ New Units

2004 F Four Major Opportunities

11 BuildBuild DominantDominant CHINACHINA Brands Brands 2 Drive PROFITABLE International Growth 3 Run GREAT Restaurants 4 Multibrand GREAT Brands YUM! China Division — Rapid Growth

New System Restaurant Openings Operating Profit ($million) Record Openings 350+ $200+ R 302 302 AG % C $161 266 39 $120

167 $56 $63 128 $39

'99 '00 '01 '02 '03 '04 F '99 '00 '01 '02 '03 '04 F

Includes People's Republic of China, Thailand, KFC Taiwan YUM! China Division — 2004 F

$200+ million Operating Profit 15% of YUM! Total

1,640+ KFCs 220+ Pizza Huts in three countries

20% Restaurant Margin

20+% ROIC

$590 million in Assets China Market Growth — Here’s Why

Ð #1 QSR Brand #1 Casual-Dining Brand Outstanding Tenured Team on the Ground in Shanghai Highly Educated Workforce $61 million G&A, 13,000+ Employees Largest Retail Development Capability Own Nationwide Distribution System China Market Distribution System — Countrywide

00 0 0 0 Beijing 0 0 0000 0 00 0 0 0 Shanghai 0 00 21 Warehouses/450+ Employees China Market Æ Two Power Brands

#1 QSR #1 Casual Dining

“Life is tastier with KFC” “Happy Moments at Pizza Hut”

AUV = $1.2 million AUV = $1.1 million China Market Developing Concepts

Taco Bell Grande Pizza Hut Home Service

East Dawning China Market Dominance

Restaurants as of Q3 ’04

1,121 2004 F Openings Approx.

600

KFC 275 QSR McD 100

136

5 PIZZA HUT 39 Casual Dining ? 0 YUM! China

UndeniableUndeniable CompetitiveCompetitive AdvantageAdvantage

HugeHuge GrowthGrowth OpportunityOpportunity Someday . . .

YUM! U.S.A. China Urban Population: 500+ million

U.S. Population: 290 million YUM! CHINA Four Major Opportunities

1 Build Dominant CHINA Brands 22 DriveDrive PROFITABLEPROFITABLE InternationalInternational Growth Growth 3 Run GREAT Restaurants 4 Multibrand GREAT Brands YUM! International Division — High-Return Growth

2004 F $328 million Operating Profit +10% 5-Year CAGR

$376 million Franchise Fees, nearly 600 Franchisees

700+ New Restaurants Opened, 4th Consecutive Year 85%+ Franchise/Joint-Venture Development

New Restaurants Opened in 50+ Countries

18% ROIC YUM! International Division Growth — Here’s Why

#1 International Brands Chicken Pizza

Malaysia South Korea

6,080 KFC System Restaurants 4,503 Pizza Hut System Restaurants in 86 countries, territories in 84 countries, territories 6 continents 6 continents

Note: Data for 2004 F YUM! International Division — Success Factors

Strong Local, Self-Sufficient Teams

80%+ Ownership Is Franchise/Joint Venture

Established Supply Chains

Over $270 million G&A Invested

Asia — Significant Profit Contributor Only Two True International Restaurant Players

International Operating Profit Estimates

1. McDonald’s $1.2 billion KFC 2.2. $328 million 3.3. Pizza Hut (Int’l Division ‘04 F, excludes China) 4. YUM! China Division $200+ million

5. Burger King 6. Subway 7. Domino’s Approximately 8. Starbuck’s $50 million 9. Wendy’s or less 10. TGI Friday’s for each 11. Darden brand 12. Brinker’s 13. Outback Steakhouse International Division Expansion Potential: Significant

International System Restaurants Today (thousand) 16+

YUM! 725+ new openings per year 6+ 4+ Long-Term Strategy — Leverage International Division Infrastructure

Grow Established Brands

sia one Sou Ind th K orea Develop Third Brand Long John Silver’s/A&W ? Long John Silver’s ? “TBD” . . . Create and/or buy, local chain ? YUM! International Division

UndeniableUndeniable CompetitiveCompetitive AdvantageAdvantage

UndeniableUndeniable GrowthGrowth Opportunity Four Major Opportunities

1 Build Dominant CHINA Brands 2 Drive PROFITABLE International Growth 33 RunRun GREATGREAT Restaurants Restaurants 4 Multibrand GREAT Brands Run Great Restaurants

Execute with Urgency & Focus GREAT

China Malaysia Good Taco Bell U.S. U.K. Mediocre Pizza Hut U.S. (last year) . . . Better this year

KFC U.S. Poor (at spin-off) Long John Silver’s U.S.

. . . Steady Improvement Run Great Restaurants Opportunity

% Restaurants with CHAMPS scores of 100%

’03 ’04

U.S. 49 53

International Division 55 60

China Division 67 72

Note: Company results as of Period 11 ’04 YTD Why It Is Important

Run Trusted Consistent Great ==Customer SSS Restaurants Experience Growth Run Great Restaurants

Executing . . . Focus on Getting Better and Better

No capacity constraints in our restaurants

Average Unit Volume U.S. Company Top 10% U.S. System Average Taco Bell $1.9 million $1.0 million Pizza Hut $1.4 million $0.7 million KFC $1.7 million $0.9 million

Note: Top 10% as of Period 11 YTD; System as of ‘03 Four Major Opportunities

11 BuildBuild DominantDominant CHINACHINA Brands Brands 2 Drive PROFITABLE International Growth 3 Run GREAT Restaurants 44 MultibrandMultibrand GREATGREAT BrandsBrands Portfolio of Category-Leading Brands

Four Category Leaders

U.S. Category Market Share* 65% 15% 47% 35%

System Restaurants 5,026 6,314 5,453 1,197 (Q3 ’04)

System Average Unit Volume 1,000+ 800+ 900+ 650+ (’04 F, $ thousand)

*Source: NPD Group Inc./CREST for 2003 YUM! U.S. Portfolio 2004 F

+3% Blended Same-Store-Sales Growth

$590 million Franchise Fees

$750 million+ in Cash Flow from Operating Activities*

500+ Multibrand Additions

Operating Profit Lower Due to Substantially Higher Commodity Costs

*Estimated Taco Bell: The Bold Choice

Positioning: When You Want to Step Up to the Freshest Ideas in Fast Food, Make the Bold Choice for Taco Bell Create a Exciting Improve Transform Powerful Brand Product News Price Value Asset Base Invitation

What we said: Continue to build on Mexican inspired Create Big Bell Value Leverage TB/LJS as “Think Outside the Extensions Menu expansion vehicle Bun” campaign New proteins Near quick-casual Update the Bold Choice quality at QSR prices building image Progress/On Deck: Continue successful Continued successful Big Bell Value Menu Northeast TB/LJS plan creative campaign line extensions successfully rolled out underway Lifestyle-oriented More . . . Higher quality soft taco sponsorships and taco salad

ThinkThink OutsideOutside TheThe BunBun Pizza Hut: Family Pizza People

Positioning: “Family Sharing” Is Best with Pizza Hut

Create a Exciting Improve Transform Powerful Brand Product News Price Value Asset Base Invitation What we said: Improve impact of Innovation leadership Traditional-value Company — delivery “Gather ’Round the pizza Franchise — dine in Good Stuff!”

Progress/On Deck: TVCs consistently among “4forAll” launched “Full House XL” 270+ WingStreets “top recalled” Continued LTO launched Italian Bistro defined Significant increase in – 40+ Bistros open “Best for Family Sharing” ratings

GatherGather ‘Round‘Round thethe GoodGood StuffStuff The KFC Situation

Increasing chicken competition from McDonald’s and Wendy’s 20,000 incremental distribution points on strips

Self-inflicted wounds Management turnover False start on Oven Roasted drove weak second-half calendar KFC Turnaround Plan

2004 Restructure (1)% to (2)% SSS New Leadership Team (President, COO, CMO, CFIO)

New Field Ops Organization/Players

New Advertising and PR Agencies

Implemented YUM! best practices in marketing and product process

Extensive brand positioning work U.S. Brands — What to Expect

% Restaurants with 100% CHAMPS Score . . . Steady Improvement

+1% to +2% Blended Same-Store-Sales Growth

+5% to +7% Operating Profit Growth

Continued Strong Cash Flow

Earn the Right to Own in Every Restaurant YUM! U.S. Brand Portfolio

UndeniableUndeniable BrandBrand LeadershipLeadership

UndeniableUndeniable CashCash FlowFlow fromfrom PortfolioPortfolio YUM! Multibrand Innovation

KFC/Taco Bell Proved the Case

Expanded Options . . . Long John Silver’s/A&W and Now Testing for Long-Term Pasta Bravo Acquisitions Optimization

Internal Innovation WingStreet Pizza Hut Italian Bistro Multibrand Innovation Æ Continued Growth

Multibrand Restaurants ’98 ’04 F Company 262 1,400 Franchise 138 1,200 TOTAL 400 2,600 % of System Restaurants 2% 14%%

Restaurant Profit/Fees ($ million) $31 $224 % U.S. Profits/Fees 2% 1177%

*Includes the estimated ongoing and initial fees from franchise restaurants and restaurant profits from company multibrands; excludes G&A. Multibrand profit/fees are included in each U.S. brand’s profits. Multibrand Growth Plan

Base Brand Multibrand Partner

(testing) (expanded testing)

Fix base business (no company expansion) YUM! Multibrand Innovation Æ What to Expect

2005 F

75+ Additions +300 – 400 Additions

550550 AdditionsAdditions YUM! Multibrand Innovation

UndeniableUndeniable ConsumerConsumer WinWin

UndeniableUndeniable CompetitiveCompetitive AdvantageAdvantage Four Major Opportunities

11 BuildBuild DominantDominant CHINACHINA Brands Brands 2 Drive PROFITABLE International Growth 3 Run GREAT Restaurants 44 MultibrandMultibrand GREATGREAT BrandsBrands Not Your Ordinary Restaurant Company

At Least 10% Annual EPS Growth

Continued Rapid Company Expansion by YUM! China Division

Continued High-Return International Division Expansion . . . 600 Franchisees

Continued Operations Improvement . . . Top Tier

Continued U.S. Multibrand Development

Substantial Cash Flow from Operations and Free Cash Flow

Increased Shareholder Payout Ratio Why 2005 Will Be Another Great Year

Improving Operations China Dominance

New International Restaurant Openings

Taco Bell, Pizza Hut Pipelines Very Good

KFC U.S. Getting Better

U.S. Commodities Somewhat Better

Strong Cash Flow