8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

___________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

April 20, 2016

Commission file number 1-13163

________________________

YUM! BRANDS, INC.

(Exact name of registrant as specified in its charter)

North Carolina	13-3951308
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1441 Gardiner Lane, Louisville, Kentucky	40213
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:  (502) 874-8300
Former name or former address, if changed since last report:   N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02      Results of Operations and Financial Condition

On April 20, 2016, YUM! Brands, Inc. ("YUM") issued a press release announcing financial results for the quarter ended March 19, 2016.  The Company also raised its full-year Operating Profit Growth Guidance to 12%. A copy of the press release is attached hereto as Exhibit 99.1.

Effective January, 2016 YUM's former India Division was segmented by brand, integrated into the global KFC, Pizza Hut and Taco Bell Divisions, and is no longer a separate operating segment. While our consolidated results were not impacted, we have restated our historical segment information for consistent presentation. This Form 8-K provides a summary of YUM's 2015 and 2014 annual and 2015 quarterly segment financial results restated as if they had been reported under our new reportable segment structure.

This restated segment information is attached hereto as Exhibit 99.2, which is being furnished pursuant to Item 2.02, Results of Operation and Financial Condition.

Section 9 – Financial Statements and Exhibits

Item 9.01      Financial Statements and Exhibits

(c)	Exhibits
99.1	Press Release dated April 20, 2016 from YUM! Brands, Inc.
99.2	Restated Segment Financial Results

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

YUM! BRANDS, INC.

(Registrant)

Date:	April 20, 2016	/s/        David E. Russell
		Interim Chief Financial Officer and Corporate Controller
		(Principal Financial and Accounting Officer)

EX-99.1

	NEWS
	Steve Schmitt
	Vice President, Investor Relations & Corporate Strategy

Yum! Brands Reports Core Operating Profit Growth of 21% in First Quarter 2016;

Raises Full-Year Core Operating Profit Growth Guidance to 12%

Louisville, KY (April 20, 2016) - Yum! Brands, Inc. (NYSE: YUM) today reported results for the first quarter ended March 19, 2016, including EPS of $0.95 excluding Special Items. On a reported basis, EPS was $0.93 and operating profit growth was 12%.

Core operating profit growth and core operating margin growth figures exclude foreign currency translation and Special Items.

FIRST-QUARTER HIGHLIGHTS

● Worldwide system sales increased 5%.

● Worldwide same-store sales increased 2%.

● Worldwide core operating profit increased 21%.

● EPS excluding Special Items increased 19% to $0.95. Reported EPS increased 14% to $0.93.

● Foreign currency translation negatively impacted operating profit by $28 million.

● Opened 295 new restaurants worldwide; 72% of international development occurred in emerging markets.

● On track with China separation to be complete by year end.

	% Change
	System Sales	Same-Store Sales	Units	Core Operating Profit	Core Operating Margin (ppts)
China Division	+11	+6	+5	+42	+4.6
KFC Division	+5	+1	+2	+4	+0.3
Pizza Hut Division	+4	+3	+1	+9	+2.6
Taco Bell Division	+3	+1	+3	+4	+1.5
Worldwide	+5	+2	+2	+21	+2.9

	First Quarter
	2016	2015	% Change
EPS Excluding Special Items	$0.95	$0.80	19%
Special Items Gain/(Loss)1	$(0.02)	$0.01	NM
EPS	$0.93	$0.81	14%

¹ See Reconciliation of Non-GAAP Measurements to GAAP Results for further detail of Special Items. Special Items in 2016 primarily relate to charges associated with the agreement reached in 2015 with KFC U.S. franchisees and costs associated with the planned separation of our China business.

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.

Note: All comparisons are versus the same period a year ago and exclude Special Items unless noted. System sales figures on this page exclude foreign currency translation.

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 "I’m very pleased with our results in the first quarter, including better-than-expected core operating profit growth of 21%, driven by 42% growth in our China business. KFC China had an outstanding Chinese New Year bucket promotion leading to 12% same-store sales growth for the quarter, underscoring the power of delivering insight-driven marketing that resonates with our customers. Companywide, all four of our Divisions posted positive same-store sales and core operating profit growth. I’m especially encouraged by the continued turnaround of our Pizza Hut U.S. business, which delivered 5% same-store sales growth.

While it’s early in the year and there may be bumps in the road, we’re confident in raising core operating profit growth guidance to 12%, from 10% previously. This is a transformational year for our company as we remain on track to finalize the separation of our China business by year end. We look forward to establishing two powerful, independent, focused growth companies dedicated to building on our brand strengths and rewarding our shareholders."

2

CHINA DIVISION

	First Quarter
			%/ppts Change
	2016	2015	Reported	Ex F/X
System Sales Growth			+6	+11
Same-Store Sales Growth (%)	+6	(12)	NM	NM
Franchise & License Fees ($MM)	25	21	+19	+25
Restaurant Margin (%)	22.4	18.9	3.5	3.4
Operating Profit ($MM)	256	190	+35	+42
Operating Margin (%)	19.7	15.1	4.6	4.6

●	China Division system sales increased 11%, excluding foreign currency translation.
○		Same-store sales increased 6%, with an increase of 12% at KFC, partially offset by a decline of 12% at Pizza Hut Casual Dining.
●	China Division opened 68 new units during the quarter.

China Units	Q1 2016	% Change2
Restaurants1	7,205	+5
KFC	5,019	+3
Pizza Hut
Casual Dining	1,596	+17
Home Service	330	+22

¹ Total includes East Dawning and Little Sheep units.

² Represents year-over-year change.

● Restaurant margin was 22.4%, an increase of 3.5 percentage points driven by sales leverage at KFC, productivity initiatives and commodity deflation, partially offset by labor inflation.

● Foreign currency translation negatively impacted operating profit by $13 million.

● Consistent with prior years, China Division's first quarter includes January and February results only. The first quarter includes Chinese New Year, which is peak season for the China Division.

● Leap year added an extra day in the quarter, resulting in an additional $6 million of operating profit.

3

KFC DIVISION

	First Quarter
			%/ppts Change
	2016	2015	Reported	Ex F/X
Restaurants	14,941	14,584	+2	NA
System Sales Growth			(2)	+5
Same-Store Sales Growth (%)	+1	+4	NM	NM
Franchise & License Fees ($MM)	195	198	(1)	+6
Restaurant Margin (%)	14.9	14.5	0.4	0.3
Operating Profit ($MM)	160	166	(4)	+4
Operating Margin (%)	25.5	25.0	0.5	0.3

● KFC Division system sales increased 5%, excluding foreign currency translation.

	First Quarter (% Change)
	Int'l Emerging Markets	Int'l Developed Markets	U.S.
System Sales Growth (Ex F/X)	+8	+5	Even
Same-Store Sales Growth	+1	+1	+1

● KFC Division opened 79 new international restaurants in 32 countries, including 56 units in emerging markets. 77% of these new units were opened by franchisees.

● Operating margin increased 0.5 percentage points driven by new-unit development.

● Core operating profit grew 7% in the quarter excluding the incremental advertising expense associated with the 2015 agreement reached with KFC U.S. franchisees.

● Foreign currency translation negatively impacted operating profit by $13 million, as approximately 90% of division profits are generated outside the U.S.

KFC MARKETS1	Percent of KFC System Sales 2	SYSTEM Sales Growth Ex F/X
		First Quarter (%)
Emerging Markets
Asia (e.g. Malaysia, Indonesia, Philippines)	7%	+9
Africa	6%	+7
Latin America (e.g. Mexico, Peru)	6%	+6
Middle East / North Africa	6%	+3
Russia	5%	+27
Thailand	3%	+5
Continental Europe (e.g. Poland)	3%	+17
India	1%	(1)
Developed Markets
U.S.	24%	Even
Australia	10%	+5
Asia (e.g. Japan, Korea, Taiwan)	9%	+6
U.K.	9%	Even
Continental Europe (e.g. France, Germany)	7%	+9
Canada	3%	+5
Latin America (e.g. Puerto Rico)	1%	(3)

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

² Reflects Full Year 2015.

4

PIZZA HUT DIVISION

	First Quarter
			%/ppts Change
	2016	2015	Reported	Ex F/X
Restaurants	14,142	14,026	+1	NA
System Sales Growth			+1	+4
Same-Store Sales Growth (%)	+3	Even	NM	NM
Franchise & License Fees ($MM)	133	128	+3	+6
Restaurant Margin (%)	11.1	11.6	(0.5)	(0.8)
Operating Profit ($MM)	87	81	+7	+9
Operating Margin (%)	32.9	29.8	3.1	2.6

● Pizza Hut Division system sales increased 4%, excluding foreign currency translation.

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

● Pizza Hut Division opened 63 new international restaurants in 27 countries, including 30 units in emerging markets. 87% of these new units were opened by franchisees.

● Operating margin increased 3.1 percentage points, driven by same-store sales growth and reduced G&A.

● Foreign currency translation negatively impacted operating profit by $1 million.

PIZZA HUT MARKETS1	Percent of Pizza Hut System Sales2	SYSTEM Sales Growth Ex F/X
		First Quarter (%)
Emerging Markets
Latin America (e.g. Mexico, Peru)	7%	+10
Asia (e.g. Malaysia, Indonesia, Philippines)	5%	+1
Middle East / North Africa	5%	+4
Continental Europe (e.g. Poland)	1%	+14
India	1%	(6)
Developed Markets
U.S.	55%	+4
Asia (e.g. Japan, Korea, Taiwan)	8%	(8)
U.K.	7%	+5
Continental Europe (e.g. France, Germany)	5%	+6
Canada	3%	+10
Australia	2%	(10)
Latin America (e.g. Puerto Rico)	1%	(5)

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

² Reflects Full Year 2015.

5

TACO BELL DIVISION

	First Quarter
			%/ppts Change
	2016	2015	Reported	Ex F/X
Restaurants	6,437	6,235	+3	NA
System Sales Growth			+3	+3
Same-Store Sales Growth (%)	+1	+6	NM	NM
Franchise & License Fees ($MM)	101	96	+6	+6
Restaurant Margin (%)	21.0	19.5	1.5	1.5
Operating Profit ($MM)	119	114	+4	+4
Operating Margin (%)	28.0	26.5	1.5	1.5

● Taco Bell Division system sales increased 3%, driven by 1% same-store sales growth and 3% unit growth.

● Taco Bell Division opened 49 new restaurants; 90% of these new units were opened by franchisees.

● Restaurant margin was 21.0%, an increase of 1.5 percentage points driven by favorable U.S. commodities and prior-year pricing actions, partially offset by labor inflation.

● Operating margin increased 1.5 percentage points driven by new-unit development and same-store sales growth, partially offset by increased G&A primarily related to higher legal costs.

SPECIAL ITEMS / SHARE REPURCHASE UPDATE

● During the first quarter of 2015, we reached an agreement with our KFC U.S. franchisees that gave us brand marketing control, as well as an accelerated path to expanded menu offerings, improved assets and an enhanced customer experience. In connection with this agreement, we recognized a Special Items charge of $9 million during the quarter, primarily related to the funding of investments for new back-of-house equipment for franchisees.

● During the quarter, we incurred a Special Items charge of $9 million for costs related to the planned separation of our China business.

● Year-to-date through April 19, 2016, we repurchased 13.3 million shares totaling $925 million at an average price of $70. Since we announced our intention to separate the China business, we have repurchased 24.7 million shares totaling $1.8 billion at an average price of $71. This is part of our previously announced plan to return $6.2 billion of capital to shareholders prior to the separation of our China business.

6

CONFERENCE CALL

Yum! Brands, Inc. will host a conference call to review the Company's financial performance and strategies at 9:15 a.m. Eastern Time Thursday, April 21, 2016. The number is 877/815-2029 for U.S. callers and 706/645-9271 for international callers, conference ID 67267109.

The call will be available for playback beginning at 12:30 p.m. Eastern Time Thursday, April 21, 2016 through midnight Wednesday, May 18, 2016. To access the playback, dial 855/859-2056 in the U.S. and 404/537-3406 internationally, conference ID 67267109.

The webcast and the playback can be accessed via the internet by visiting Yum! Brands' website, www.yum.com/investors and selecting “Q1 2016 Earnings Conference Call” under “Events & Presentations.”

ADDITIONAL INFORMATION ONLINE

Quarter end dates for each division, restaurant-count details and definitions of terms are available online at www.yum.com/investors.

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,” “will,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements reflect our current expectations, estimates or projections concerning future results or events, including, without limitation, statements regarding the intended capital return to shareholders as well as the related borrowing required to fund such capital return, the planned separation of the Yum! Brands and Yum! China businesses, the timing of any such separation, the future earnings and performance as well as capital structure of Yum! Brands, Inc. or any of its businesses, including the Yum! Brands and Yum! China businesses on a standalone basis if the separation is completed. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. 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. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to return capital to shareholders at the times and in the amounts currently anticipated, if at all, as well as the corresponding costs of borrowing to fund such capital return as well as other costs; whether the separation of the Yum! Brands and Yum! China businesses is completed, as expected or at all, and the timing of any such separation; whether the operational and strategic benefits of the separation can be achieved; whether the costs and expenses of the separation can be controlled within expectations, including potential tax costs; as well as other risks. 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. 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 Annual Report or Form 10-K) for additional detail about factors that could affect our financial and other results. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures are included on our website at www.yum.com/investors.

Yum! Brands, Inc., based in Louisville, Kentucky, has nearly 43,000 restaurants in more than 130 countries and territories. Yum! is ranked #228 on the Fortune 500 List with revenues of over $13 billion in 2015 and is one of the Aon Hewitt Top Companies for Leaders in North America. The Company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development.

Analysts are invited to contact:
	Steve Schmitt, Vice President, Investor Relations & Corporate Strategy, at 888/298-6986
	Elizabeth Grenfell, Director, Investor Relations, at 888/298-6986
Members of the media are invited to contact:
	Virginia Ferguson, Director, Public Relations, at 502/874-8200

7

YUM! Brands, Inc.

Condensed Consolidated Summary of Results

(amounts in millions, except per share amounts)

(unaudited)

	Quarter ended						% Change
	3/19/16			3/21/15			B/(W)
Company sales	$	2,165		$	2,179		(1)
Franchise and license fees and income	454			443			3
Total revenues	2,619			2,622			—
Company restaurant expenses
Food and paper	649			688			6
Payroll and employee benefits	486			493			2
Occupancy and other operating expenses	597			616			3
Company restaurant expenses	1,732			1,797			4
General and administrative expenses	286			295			3
Franchise and license expenses	48			34			(36)
Closures and impairment (income) expenses	3			3			3
Refranchising (gain) loss	(7		)	(10		)	(33)
Other (income) expense	(7		)	(3		)	NM
Total costs and expenses, net	2,055			2,116			3
Operating Profit	564			506			12
Interest expense, net	37			34			(9)
Income before income taxes	527			472			12
Income tax provision	132			111			(19)
Net income - including noncontrolling interests	395			361			9
Net income (loss) - noncontrolling interests	4			(1		)	NM
Net income - YUM! Brands, Inc.	$	391		$	362		8
Effective tax rate	25.0		%	23.4		%	(1.6 ppts.)
Basic EPS Data
EPS	$	0.94		$	0.83		14
Average shares outstanding	416			438			5
Diluted EPS Data
EPS	$	0.93		$	0.81		14
Average shares outstanding	422			446			5
Dividends declared per common share	$	0.46		$	—

See accompanying notes.

 Percentages may not recompute due to rounding.

8

YUM! Brands, Inc.

CHINA DIVISION Operating Results

(amounts in millions)

(unaudited)

	Quarter ended						% Change
	3/19/16			3/21/15			B/(W)
Company sales	$	1,278		$	1,235		3
Franchise and license fees and income	25			21			19
Total revenues	1,303			1,256			4
Company restaurant expenses
Food and paper	385			392			2
Payroll and employee benefits	245			244			(1)
Occupancy and other operating expenses	362			366			1
Company restaurant expenses	992			1,002			1
General and administrative expenses	66			68			3
Franchise and license expenses	4			4			6
Closures and impairment (income) expenses	—			2			80
Other (income) expense	(15		)	(10		)	62
Total costs and expenses, net	1,047			1,066			2
Operating Profit	$	256		$	190		35
Company sales	100.0		%	100.0		%
Food and paper	30.1			31.8			1.7 ppts.
Payroll and employee benefits	19.2			19.7			0.5 ppts.
Occupancy and other operating expenses	28.3			29.6			1.3 ppts.
Restaurant margin	22.4		%	18.9		%	3.5 ppts.
Operating margin	19.7		%	15.1		%	4.6 ppts.

See accompanying notes.

Percentages may not recompute due to rounding.

9

YUM! Brands, Inc.

KFC DIVISON Operating Results

(amounts in millions)

(unaudited)

	Quarter ended						% Change
	3/19/16			3/21/15			B/(W)
Company sales	$	430		$	464		(7)
Franchise and license fees and income	195			198			(1)
Total revenues	625			662			(5)
Company restaurant expenses
Food and paper	145			161			10
Payroll and employee benefits	103			107			4
Occupancy and other operating expenses	118			129			8
Company restaurant expenses	366			397			8
General and administrative expenses	76			82			6
Franchise and license expenses	21			17			(23)
Closures and impairment (income) expenses	2			—			NM
Other (income) expense	—			—			(80)
Total costs and expenses, net	465			496			6
Operating Profit	$	160		$	166		(4)
Company sales	100.0		%	100.0		%
Food and paper	33.7			34.6			0.9 ppts.
Payroll and employee benefits	23.9			23.1			(0.8 ppts.)
Occupancy and other operating expenses	27.5			27.8			0.3 ppts.
Restaurant margin	14.9		%	14.5		%	0.4 ppts.
Operating margin	25.5		%	25.0		%	0.5 ppts.

See accompanying notes.

Percentages may not recompute due to rounding.

10

YUM! Brands, Inc.

PIZZA HUT DIVISION Operating Results

(amounts in millions)

(unaudited)

	Quarter ended						% Change
	3/19/16			3/21/15			B/(W)
Company sales	$	132		$	144		(8)
Franchise and license fees and income	133			128			3
Total revenues	265			272			(3)
Company restaurant expenses
Food and paper	36			40			9
Payroll and employee benefits	41			44			7
Occupancy and other operating expenses	40			43			6
Company restaurant expenses	117			127			7
General and administrative expenses	50			57			14
Franchise and license expenses	10			9			(13)
Closures and impairment (income) expenses	1			—			NM
Other (income) expense	—			(2		)	NM
Total costs and expenses, net	178			191			7
Operating Profit	$	87		$	81		7
Company sales	100.0		%	100.0		%
Food and paper	27.4			27.8			0.4 ppts.
Payroll and employee benefits	31.1			30.8			(0.3 ppts.)
Occupancy and other operating expenses	30.4			29.8			(0.6 ppts.)
Restaurant margin	11.1		%	11.6		%	(0.5 ppts.)
Operating margin	32.9		%	29.8		%	3.1 ppts.

See accompanying notes.

Percentages may not recompute due to rounding.

11

YUM! Brands, Inc.

TACO BELL DIVISION Operating Results

(amounts in millions)

(unaudited)

	Quarter ended						% Change
	3/19/16			3/21/15			B/(W)
Company sales	$	325		$	336		(3)
Franchise and license fees and income	101			96			6
Total revenues	426			432			(1)
Company restaurant expenses
Food and paper	83			95			12
Payroll and employee benefits	97			98			1
Occupancy and other operating expenses	77			78			1
Company restaurant expenses	257			271			5
General and administrative expenses	46			44			(6)
Franchise and license expenses	4			2			(24)
Closures and impairment (income) expenses	—			1			99
Other (income) expense	—			—			(25)
Total costs and expenses, net	307			318			3
Operating Profit	$	119		$	114		4
Company sales	100.0		%	100.0		%
Food and paper	25.5			28.2			2.7 ppts.
Payroll and employee benefits	29.7			29.1			(0.6 ppts.)
Occupancy and other operating expenses	23.8			23.2			(0.6 ppts.)
Restaurant margin	21.0		%	19.5		%	1.5 ppts.
Operating margin	28.0		%	26.5		%	1.5 ppts.

See accompanying notes.

Percentages may not recompute due to rounding.

12

YUM! Brands, Inc.

Condensed Consolidated Balance Sheets

(amounts in millions)

	(unaudited)
	3/19/16			12/26/15
ASSETS
Current Assets
Cash and cash equivalents	$	934		$	737
Accounts and notes receivable, less allowance: $20 in 2016 and $16 in 2015	418			377
Inventories	210			229
Prepaid expenses and other current assets	279			241
Advertising cooperative assets, restricted	122			103
Total Current Assets	1,963			1,687
Property, plant and equipment, net of accumulated depreciation and amortization of $3,682 in
2016 and $3,643 in 2015	4,111			4,189
Goodwill	644			656
Intangible assets, net	265			271
Investments in unconsolidated affiliates	36			61
Other assets	500			521
Deferred income taxes	702			676
Total Assets	$	8,221		$	8,061
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other current liabilities	$	2,055		$	1,985
Income taxes payable	150			77
Short-term borrowings	2,321			922
Advertising cooperative liabilities	122			103
Total Current Liabilities	4,648			3,087
Long-term debt	2,510			3,040
Other liabilities and deferred credits	846			959
Total Liabilities	8,004			7,086
Redeemable noncontrolling interest	7			6
Shareholders' Equity
Common stock, no par value, 750 shares authorized; 407 shares and 420 shares issued in 2016 and 2015, respectively	2			—
Retained earnings	454			1,150
Accumulated other comprehensive income (loss)	(300		)	(239		)
Total Shareholders' Equity - YUM! Brands, Inc.	156			911
Noncontrolling interests	54			58
Total Shareholders' Equity	210			969
Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity	$	8,221		$	8,061

 See accompanying notes.

13

YUM! Brands, Inc.

Condensed Consolidated Statements of Cash Flows

(amounts in millions)

(unaudited)

	Quarter ended
	3/19/16			3/21/15
Cash Flows - Operating Activities
Net income - including noncontrolling interests	$	395		$	361
Depreciation and amortization	136			139
Closures and impairment (income) expenses	3			3
Refranchising (gain) loss	(7		)	(10		)
Contributions to defined benefit pension plans	(2		)	(76		)
Deferred income taxes	(25		)	(29		)
Equity income from investments in unconsolidated affiliates	(16		)	(9		)
Excess tax benefit from share-based compensation	(11		)	(19		)
Share-based compensation expense	13			15
Changes in accounts and notes receivable	33			3
Changes in inventories	17			21
Changes in prepaid expenses and other current assets	—			(27		)
Changes in accounts payable and other current liabilities	66			113
Changes in income taxes payable	95			51
Other, net	(38		)	(20		)
Net Cash Provided by Operating Activities	659			516
Cash Flows - Investing Activities
Capital spending	(160		)	(227		)
Changes in short-term investments, net	(51		)	(24		)
Proceeds from refranchising of restaurants	9			22
Other, net	1			33
Net Cash Used in Investing Activities	(201		)	(196		)
Cash Flows - Financing Activities
Repayments of long-term debt	(2		)	(3		)
Short-term borrowings by original maturity
More than three months - proceeds	1,400			—
More than three months - payments	—			—
Three months or less, net	—			—
Revolving credit facilities, three months or less, net	(524		)	53
Repurchase shares of Common Stock	(925		)	(124		)
Excess tax benefit from share-based compensation	11			19
Employee stock option proceeds	1			10
Dividends paid on Common Stock	(192		)	(178		)
Other, net	(12		)	(23		)
Net Cash Used in Financing Activities	(243		)	(246		)
Effect of Exchange Rate on Cash and Cash Equivalents	(18		)	23
Net Increase in Cash and Cash Equivalents	197			97
Cash and Cash Equivalents - Beginning of Period	737			578
Cash and Cash Equivalents - End of Period	$	934		$	675

See accompanying notes.

14

Reconciliation of Non-GAAP Measurements to GAAP Results

(amounts in millions, except per share amounts)

(unaudited)

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 in 2016 and 2015 on a basis before Special Items. Included in Special Items are gains/(losses) associated with the costs associated with the planned spin-off of the China business and YUM recapitalization, costs associated with the KFC U.S. Acceleration Agreement and certain refranchising initiatives. These amounts are described in (c), (d) and (e) in the accompanying notes.   

The Company uses earnings before Special Items as a key performance measure of results of operations for the purpose of evaluating performance internally and Special Items are not included in any of our segment results.  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 in the quarters ended March 19, 2016 and March 21, 2015 that the Company does not believe are indicative of our ongoing operations due to their size and/or nature. 

	Quarter ended
	3/19/16			3/21/15
Detail of Special Items
Costs associated with the planned spin-off of the China business and YUM recapitalization(c)	$	(9	)	$	—
Costs associated with KFC U.S. Acceleration Agreement(d)	(9		)	(2		)
Refranchising initiatives(e)	3			7
Total Special Items Income (Expense)	(15		)	5
Tax Benefit (Expense) on Special Items	4			(2		)
Special Items Income (Expense), net of tax	$	(11	)	$	3
Average diluted shares outstanding	422			446
Special Items diluted EPS	$	(0.02	)	$	0.01
Reconciliation of Operating Profit Before Special Items to Reported Operating Profit
Operating Profit Before Special Items	$	579		$	501
Special Items Income (Expense)	(15		)	5
Reported Operating Profit	$	564		$	506
Reconciliation of EPS Before Special Items to Reported EPS
Diluted EPS Before Special Items	$	0.95		$	0.80
Special Items EPS	(0.02		)	0.01
Reported EPS	$	0.93		$	0.81
Reconciliation of Effective Tax Rate Before Special Items to Reported Effective Tax Rate
Effective Tax Rate Before Special Items	25.0		%	23.3		%
Impact on Tax Rate as a result of Special Items	—		%	0.1		%
Reported Effective Tax Rate	25.0		%	23.4		%

15

YUM! Brands, Inc.

Segment Results

(amounts in millions)

(unaudited)

Quarter Ended 3/19/16	China			KFC		Pizza Hut		Taco Bell		Corporate and Unallocated			Consolidated
Total revenues	$	1,303		$	625	$	265	$	426	$	—		$	2,619
Company restaurant expenses	992			366		117		257		—			1,732
General and administrative expenses	66			76		50		46		48			286
Franchise and license expenses	4			21		10		4		9			48
Closures and impairment (income) expenses	—			2		1		—		—			3
Refranchising (gain) loss	—			—		—		—		(7		)	(7		)
Other (income) expense	(15		)	—		—		—		8			(7		)
	1,047			465		178		307		58			2,055
Operating Profit (loss)	$	256		$	160	$	87	$	119	$	(58	)	$	564

Quarter Ended 3/21/15	China			KFC		Pizza Hut			Taco Bell		Corporate and Unallocated			Consolidated
Total revenues	$	1,256		$	662	$	272		$	432	$	—		$	2,622
Company restaurant expenses	1,002			397		127			271		—			1,797
General and administrative expenses	68			82		57			44		44			295
Franchise and license expenses	4			17		9			2		2			34
Closures and impairment (income) expenses	2			—		—			1		—			3
Refranchising (gain) loss	—			—		—			—		(10		)	(10		)
Other (income) expense	(10		)	—		(2		)	—		9			(3		)
	1,066			496		191			318		45			2,116
Operating Profit (loss)	$	190		$	166	$	81		$	114	$	(45	)	$	506

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Summary of Results.  Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.

The Corporate and Unallocated column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See Reconciliation of Non-GAAP Measurements to GAAP Results.

16

Notes to the Condensed Consolidated Summary of Results, Condensed Consolidated Balance Sheets

and Condensed Consolidated Statements of Cash Flows

(amounts in millions)

(unaudited)

(a) Amounts presented as of and for the quarter ended March 19, 2016 are preliminary.

(b) Other (income) expense for the China Division primarily consists of equity (income) loss from investments in unconsolidated affiliates.

(c) In October, 2015 we announced our intent to separate YUM’s China business from YUM into an independent, publicly-traded company by the end of 2016. This transaction, which is expected to be a tax-free spin-off of our China business, will create two powerful, independent, focused growth companies with distinct strategies, financial profiles and investment characteristics. Additionally, we plan to optimize the capital structure of YUM! Brands through the issuance of new debt that will allow us to return significant capital to shareholders. During the quarter ended March 19, 2016 we incurred costs of $9 million related to these initiatives.

(d) During the first quarter of 2015, we reached an agreement with our KFC U.S. franchisees that gave us brand marketing control as well as an accelerated path to improved assets and customer experience. In connection with this agreement we recognized Special Item charges for the quarter ended March 19, 2016 of $9 million, primarily related to the funding of investments for new back-of-house equipment for franchisees.

(e) We have historically recorded refranchising gains and losses in the U.S. as Special Items due to the scope of our refranchising program and the volatility in associated gains and losses. Beginning in 2016, we are also including all international refranchising gains and losses, excluding China, in Special Items. The inclusion in Special Items of these additional international refranchising gains and losses is the result of the anticipated size and volatility of refranchising initiatives outside the U.S. that will take place in connection with our previously announced plans to have 96% franchise ownership by the end of 2017. During the quarters ended March 19, 2016 and March 21, 2015 we recorded refranchising gains of $3 million and $7 million, respectively, that have been reflected as Special Items.

17

EX-99.2

YUM! Brands, Inc.

Recast Annual Segment Operating Results

(amounts in millions)

(unaudited)

Year Ended 12/26/15	China			KFC			Pizza Hut			Taco Bell			Corporate and Unallocated			Consolidated
Company sales	$	6,789		$	2,203		$	609		$	1,544		$	—		$	11,145
Franchise and license fees and income	120			850			543			447			—			1,960
Total revenues	6,909			3,053			1,152			1,991			—			13,105
Company restaurant expenses
Food and paper	2,159			757			169			422			—			3,507
Payroll and employee benefits	1,386			513			190			428			—			2,517
Occupancy and other operating expenses	2,167			625			191			352			—			3,335
Company restaurant expenses	5,712			1,895			550			1,202			—			9,359
General and administrative expenses	397			401			272			230			204			1,504
Franchise and license expenses	20			89			40			22			71			242
Closures and impairment (income) expenses	64			9			3			3			—			79
Refranchising (gain) loss	—			—			—			—			10			10
Other (income) expense	(41		)	(2		)	(2		)	(2		)	37			(10		)
Total costs and expenses, net	6,152			2,392			863			1,455			322			11,184
Operating Profit (loss)	$	757		$	661		$	289		$	536		$	(322	)	$	1,921

Year Ended 12/27/14	China			KFC		Pizza Hut		Taco Bell			Corporate and Unallocated			Consolidated
Company sales	$	6,821		$	2,440	$	609	$	1,454		$	—		$	11,324
Franchise and license fees and income	113			881		550		411			—			1,955
Total revenues	6,934			3,321		1,159		1,865			—			13,279
Company restaurant expenses
Food and paper	2,207			858		181		432			—			3,678
Payroll and employee benefits	1,407			568		189		414			1			2,579
Occupancy and other operating expenses	2,198			703		190		334			—			3,425
Company restaurant expenses	5,812			2,129		560		1,180			1			9,682
General and administrative expenses	391			399		253		187			189			1,419
Franchise and license expenses	16			80		46		18			—			160
Closures and impairment (income) expenses	54			10		5		3			463			535
Refranchising (gain) loss	—			—		—		—			(33		)	(33		)
Other (income) expense	(52		)	1		1		(1		)	10			(41		)
Total costs and expenses, net	6,221			2,619		865		1,387			630			11,722
Operating Profit (loss)	$	713		$	702	$	294	$	478		$	(630	)	$	1,557

Effective January 2016, the Company’s India business integrated its three restaurant brands into our global KFC, Pizza Hut and Taco Bell Divisions. The above tables represent recasted annual segment operating results due to this reorganization. The China division and Corporate and Unallocated amounts were not impacted by this reorganization.

YUM! Brands, Inc.

Recast Quarterly Segment Operating Results

(amounts in millions)

(unaudited)

Quarter Ended 3/21/15	China			KFC		Pizza Hut			Taco Bell		Corporate and Unallocated			Consolidated
Company sales	$	1,235		$	464	$	144		$	336	$	—		$	2,179
Franchise and license fees and income	21			198		128			96		—			443
Total revenues	1,256			662		272			432		—			2,622
Company restaurant expenses
Food and paper	392			161		40			95		—			688
Payroll and employee benefits	244			107		44			98		—			493
Occupancy and other operating expenses	366			129		43			78		—			616
Company restaurant expenses	1,002			397		127			271		—			1,797
General and administrative expenses	68			82		57			44		44			295
Franchise and license expenses	4			17		9			2		2			34
Closures and impairment (income) expenses	2			—		—			1		—			3
Refranchising (gain) loss	—			—		—			—		(10		)	(10		)
Other (income) expense	(10		)	—		(2		)	—		9			(3		)
Total costs and expenses, net	1,066			496		191			318		45			2,116
Operating Profit (loss)	$	190		$	166	$	81		$	114	$	(45	)	$	506

Quarter Ended 6/13/15	China			KFC			Pizza Hut		Taco Bell			Corporate and Unallocated			Consolidated
Company sales	$	1,608		$	535		$	145	$	371		$	—		$	2,659
Franchise and license fees and income	28			191			121		106			—			446
Total revenues	1,636			726			266		477			—			3,105
Company restaurant expenses
Food and paper	515			183			40		103			—			841
Payroll and employee benefits	333			123			45		101			—			602
Occupancy and other operating expenses	526			151			46		82			—			805
Company restaurant expenses	1,374			457			131		286			—			2,248
General and administrative expenses	100			97			63		47			46			353
Franchise and license expenses	5			21			9		4			8			47
Closures and impairment (income) expenses	17			3			3		1			—			24
Refranchising (gain) loss	—			—			—		—			68			68
Other (income) expense	(4		)	(1		)	—		(1		)	—			(6		)
Total costs and expenses, net	1,492			577			206		337			122			2,734
Operating Profit (loss)	$	144		$	149		$	60	$	140		$	(122	)	$	371

YUM! Brands, Inc.

Recast Quarterly Segment Operating Results

(amounts in millions)

(unaudited)

Quarter Ended 9/5/15	China			KFC		Pizza Hut			Taco Bell		Corporate and Unallocated			Consolidated
Company sales	$	1,935		$	526	$	141		$	366	$	—		$	2,968
Franchise and license fees and income	34			195		123			107		—			459
Total revenues	1,969			721		264			473		—			3,427
Company restaurant expenses
Food and paper	611			182		40			100		—			933
Payroll and employee benefits	356			124		44			101		—			625
Occupancy and other operating expenses	589			152		46			84		—			871
Company restaurant expenses	1,556			458		130			285		—			2,429
General and administrative expenses	90			96		60			50		32			328
Franchise and license expenses	6			23		10			5		21			65
Closures and impairment (income) expenses	3			—		(1		)	1		—			3
Refranchising (gain) loss	—			—		—			—		2			2
Other (income) expense	(13		)	—		—			—		10			(3		)
Total costs and expenses, net	1,642			577		199			341		65			2,824
Operating Profit (loss)	$	327		$	144	$	65		$	132	$	(65	)	$	603

Quarter Ended 12/26/15	China			KFC			Pizza Hut		Taco Bell			Corporate and Unallocated			Consolidated
Company sales	$	2,011		$	678		$	179	$	471		$	—		$	3,339
Franchise and license fees and income	37			266			171		138			—			612
Total revenues	2,048			944			350		609						3,951
Company restaurant expenses
Food and paper	641			231			49		124			—			1,045
Payroll and employee benefits	453			159			57		128			—			797
Occupancy and other operating expenses	686			193			56		108			—			1,043
Company restaurant expenses	1,780			583			162		360			—			2,885
General and administrative expenses	139			126			92		89			82			528
Franchise and license expenses	5			28			12		11			40			96
Closures and impairment (income) expenses	42			6			1		—			—			49
Refranchising (gain) loss	—			—			—		—			(50		)	(50		)
Other (income) expense	(14		)	(1		)	—		(1		)	18			2
Total costs and expenses, net	1,952			742			267		459			90			3,510
Operating Profit (loss)	$	96		$	202		$	83	$	150		$	(90	)	$	441

YUM! Brands, Inc.

Recast Annual Division System Sales Growth

(unaudited)

Year Ended 12/26/15	China			KFC			Pizza Hut			Taco Bell		Worldwide
System sales, reported	—		%	(4	)	%	(2	)	%	8	%	(1	)	%
System sales, excluding FX	2		%	6		%	2		%	8	%	5		%
Same store sales growth (decline)	(4	)	%	3		%	—		%	5	%	1		%

Year Ended 12/27/14	China			KFC		Pizza Hut			Taco Bell		Worldwide
System sales, reported	1		%	2	%	—		%	4	%	2	%
System sales, excluding FX	1		%	6	%	1		%	4	%	3	%
Same store sales growth (decline)	(5	)	%	3	%	(1	)	%	3	%	—	%

YUM! Brands, Inc.
Recast Quarterly Division System Sales Growth
(unaudited)
Quarter Ended 3/21/15	China			KFC			Pizza Hut			Taco Bell		Worldwide
System sales, reported	(9	)	%	1		%	(1	)	%	9	%	—		%
System sales, excluding FX	(6	)	%	8		%	2		%	9	%	4		%
Same store sales growth (decline)	(12	)	%	4		%	—		%	6	%	—		%
Quarter Ended 6/13/15	China			KFC			Pizza Hut			Taco Bell		Worldwide
System sales, reported	(4	)	%	(4	)	%	(3	)	%	9	%	(2	)	%
System sales, excluding FX	(4	)	%	6		%	2		%	9	%	3		%
Same store sales growth (decline)	(10	)	%	2		%	—		%	6	%	—		%
Quarter Ended 9/5/15	China			KFC			Pizza Hut			Taco Bell		Worldwide
System sales, reported	7		%	(6	)	%	(3	)	%	7	%	—		%
System sales, excluding FX	8		%	6		%	2		%	7	%	6		%
Same store sales growth (decline)	2		%	3		%	1		%	4	%	2		%
Quarter Ended 12/26/15	China			KFC			Pizza Hut			Taco Bell		Worldwide
System sales, reported	3		%	(6	)	%	(3	)	%	7	%	(1	)	%
System sales, excluding FX	7		%	6		%	2		%	7	%	6		%
Same store sales growth (decline)	2		%	2		%	1		%	4	%	2		%