CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions	6 Months Ended
	Jun. 11, 2011		Jun. 12, 2010
Cash Flows - Operating Activities
Net Income - including noncontrolling interests	$ 589		$ 534
Depreciation and amortization	269		256
Closures and impairment (income) expenses	88		16
Refranchising (gain) loss	3	[1],[2]	53	[1],[2],[3]
Contributions to defined benefit pension plans	(11)		(19)
Deferred income taxes	(48)		(78)
Equity income from investments in unconsolidated affiliates	(27)		(20)
Distributions of income received from unconsolidated affiliates	16		8
Excess tax benefits from share-based compensation	(22)		(23)
Share-based compensation expense	26		24
Changes in accounts and notes receivable	9		28
Changes in inventories	20		(19)
Changes in prepaid expenses and other current assets	(23)		2
Changes in accounts payable and other current liabilities	(71)		29
Changes in income taxes payable	72		54
Other, net	33		(12)
Net Cash Provided by Operating Activities	923		833
Cash Flows - Investing Activities
Capital spending	(330)		(327)
Proceeds from refranchising of restaurants	49		83
Acquisition of restaurants from franchisees	(1)		(2)
Sales of property, plant and equipment	9		13
Increase in restricted cash	(300)		0
Other, net	(6)		(6)
Net Cash Used in Investing Activities	(579)		(239)
Cash Flows - Financing Activities
Repayments of long-term debt	(658)		(8)
Revolving credit facilities, three months or less, net	350		(5)
Short-term borrowings by original maturity
More than three months - proceeds	0		0
More than three months - payments	0		0
Three months or less, net	0		(3)
Repurchase shares of Common Stock	(319)		(247)
Excess tax benefits from share-based compensation	22		23
Employee stock option proceeds	22		44
Dividends paid on Common Stock	(234)		(197)
Other, net	(23)		(19)
Net Cash Used in Financing Activities	(840)		(412)
Effect of Exchange Rates on Cash and Cash Equivalents	25		(5)
Net Increase (Decrease) in Cash and Cash Equivalents	(471)		177
Cash and Cash Equivalents - Beginning of Period	1,426		353
Cash and Cash Equivalents - End of Period	$ 955		$ 530

[1] Refranchising (gain) loss is not allocated to segments for performance reporting purposes.

[2] U.S. refranchising loss for the year to date ended June 12, 2010 included $73 million in non-cash impairment charges related to our offer to refranchise a substantial portion of our Company operated KFCs in the U.S.  We recorded an additional $12 million and $2 million in non-cash impairment charges related to these restaurants in the quarters ended December 25, 2010 and June 11, 2011, respectively.  The majority of these restaurants offered for sale in 2010 continue to be Company operated at June 11, 2011.  We believed in 2010 and continue to believe at June 11, 2011 that the restaurant groups for which we have not yet entered into agreements to sell do not meet the criteria to be classified as held for sale.  Consistent with our historical policy, we are reviewing these restaurant groups for impairment on a held for use basis each quarter as a result of our intent to refranchise.  To the extent the carrying value of these restaurant groups are not recoverable based upon our estimate of expected refranchising proceeds and holding period cash flows while we continue to operate the restaurants, they are written down to current estimates of their fair value.  These fair value estimates, which are based on the sales price we would expect to receive for each restaurant group, consider current market conditions, real-estate values, trends in the KFC-U.S. business, prices for similar transactions in the restaurant industry and preliminary offers for any restaurant groups to date.  We continue to depreciate the carrying values of the restaurant assets, net of the aforementioned impairment charges, and will continue to do so through the date we believe the held for sale criteria for any restaurant groups are met.  The $85 million and $2 million in impairment charges recorded in 2010 and 2011, respectively, do not include any allocation of the KFC reporting unit goodwill in the restaurant groups’ carrying values.  This additional non-cash write down is being recorded, consistent with our historical policy, when a restaurant group ultimately meets the criteria to be classified as held for sale.  We will also be required to record a charge for the fair value of our guarantee of future lease payments for leases we assign to the franchisee upon any sale.

[3] During the quarter ended March 20, 2010 we refranchised all of our remaining company restaurants in Taiwan, which consisted of 124 KFCs.  We included in our March 20, 2010 financial statements a non-cash write-off of $7 million of goodwill in determining the loss on refranchising of Taiwan.  This loss did not result in a related income tax benefit, and was not allocated to any segment for performance reporting purposes.  The amount of goodwill write-off was based on the relative fair values of the Taiwan business disposed of and the portion of the business that was retained.  The fair value of the business disposed of was determined by reference to the discounted value of the future cash flows expected to be generated by the restaurants and retained by the franchisee, which included a deduction for the anticipated royalties the franchisee will pay the Company associated with the franchise agreement entered into in connection with this refranchising transaction. The fair value of the Taiwan business retained consisted of expected net cash flows to be derived from royalties from franchisees, including the royalties associated with the franchise agreement entered into in connection with this refranchising transaction.  We believed the terms of the franchise agreement entered into in connection with the Taiwan refranchising were substantially consistent with market.  The remaining carrying value of goodwill related to our Taiwan business of $30 million, after the aforementioned write-off, was determined not to be impaired subsequent to the refranchising as the fair value of the Taiwan reporting unit exceeded its carrying amount.