ADDING MULTIMEDIA Yum! Brands Inc. Reports Strong Full-Year 2006 EPS of $2.92, an Increase of 14%, Led by Powerful Growth in China and International.

LOUISVILLE, Ky. -- Yum! Brands Inc. (NYSE: YUM) today also reported results for the fourth quarter ended December 30, 2006, and provided the company's latest outlook for 2007.

The sales, profit, and margin percentage highlights for the fourth quarter and full year that follow are stated on a like-for-like basis excluding the benefit of an extra week in the fourth quarter of 2005.

Highlights for the fourth quarter are . . .

* EPS of $0.83, an increase of 8%.

* Worldwide system sales increased by 7%.

* Worldwide same-store sales grew 3%, and total worldwide restaurants increased by 2%.

* Worldwide restaurant margin improved 0.9 percentage points with improvements in both international businesses, and U.S. margin was even.

* Worldwide operating profit grew 7%.

Highlights for the full year are . . .

* Worldwide system sales grew by 5%.

* Worldwide operating profit increased 12%.

* Strong double-digit operating-profit growth from our international divisions: China, 37% and YRI, 11%.

* Mainland China restaurant unit growth of 18%.

* Yum! Restaurants International Division (YRI) restaurant growth of 3%, making this our eighth consecutive year with at least 3% restaurant growth.

* Worldwide franchise fees increased 7%.

* Restaurant margin increased 1.2 percentage points worldwide and improved in all three business segments.

* Operating margin expanded 1.0 percentage points worldwide.

* Average diluted shares outstanding were reduced by 6%.

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

FULL-YEAR 2007 OUTLOOK

The company continues to expect full-year 2007 EPS growth of at least 10%, or at least $3.21 per share.

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Note: YUM has 34,595 restaurant locations around the world, which include 2,137 license units.

David C. Novak, Chairman and CEO, said, "I am pleased to report that in 2006 we again demonstrated the power of Yum! with our capability to consistently deliver double-digit EPS growth through our global portfolio of leading restaurant brands. We achieved strong EPS growth of 14%, led by continued profitable international growth, including nearly 400 new restaurants in our China Division, despite a disappointing fourth-quarter performance in the U.S. This marks the fifth straight year of delivering on our annual commitment of at least 10% EPS growth.

"Importantly, we continued to return significant cash to shareholders in 2006 while maintaining a strong balance sheet. In fact, we returned $1.1 billion through share buy backs and dividends, making this the second straight year that we returned more than $1 billion to our shareholders. Additionally, this past December we announced the doubling of our quarterly dividend rate from $0.15 to $0.30 per share after initiating a dividend only two years ago. This new quarterly dividend rate is expected to generate an approximate 2% yield for our shareholders beginning in our second quarter 2007.

"As we look ahead to our expectations for 2007, we remain confident we can continue to build on our track record of growing EPS at least 10% each year by generating 20% operating profit growth from our China Division, 10% from our YRI Division and 5% from our U.S. businesses.

"Shareholders should expect us to continue building consistent value by focusing on executing YUM's unique growth opportunities -- building dominant restaurant brands in China, driving profitable international growth, improving U.S. brand positioning and returns, and driving high ROIC and strong shareholder payout -- that make us a global growth company and allow us to generate substantial free cash flow."

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Note: China Division includes mainland China, Thailand and the KFC Taiwan business.

For the fourth quarter 2006, company sales for the China Division increased 23% in local-currency terms due to the continued strong expansion of both our KFC and Pizza Hut brands in mainland China. In particular, mainland China experienced strong fourth-quarter system-same-store-sales growth of 12%, and restaurant unit growth of 18%.

Fourth-quarter 2006 reported operating profit increased 36% versus last year. The key contributing factor was continued sales growth in mainland China for both KFC and Pizza Hut.

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Note: Full year 2005 and Q4 2005 benefited from having an extra week. The following discussion addresses 2006 performance on a like-for-like basis or without this benefit in 2005.

Fourth-quarter 2006 operating profit increased 18% including the positive impact of foreign exchange. In addition, system-sales increased 11% in local currency terms, one of the best quarterly performances ever for the division. The key contributing factors were the strength of the franchise businesses around the world with strong same-store-sales growth of 7% and the recovery of the KFC U.K. business. Finally, YRI opened 333 and 785 new traditional restaurants for the fourth quarter and full year 2006 respectively, of which 90% were opened by franchisees.

The acquisition of the remaining 50% ownership of the Pizza Hut U.K. joint venture from Whitbread was completed during the fourth quarter 2006, which impacted certain fourth-quarter and full-year financial measures. Excluding the impact of the acquisition and foreign exchange, the growth rates for the following fourth-quarter and full-year measures would have been: franchise fees, 13% and 13%, and company sales, +4% and even. Additionally, operating margin would have been 17.3% and 18.9% respectively.

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Note: Full year 2005 and Q4 2005 benefited from having an extra week. The following discussion addresses 2006 performance on a like-for-like basis or without this benefit in 2005.

For the fourth quarter, operating profit was lower by 8% primarily as a result of higher closure and impairment expenses. An additional factor was a 2% decline in blended company same-stores sales. The primary driver of the same-store sales decline was Taco Bell's decline of 5%, lapping a very strong +7% in the fourth quarter last year. This also reflects a very significant negative sales impact during the month of December from adverse publicity related to a produce-sourcing issue. The low point of the Taco Bell sales decline occurred during the third week of December, and sales have begun to recover from that point in time.

Refranchising company restaurants negatively impacted fourth-quarter and full-year company-sales growth by 6 and 5 percentage points respectively.

For the fourth quarter, franchise sales and fees grew as a result of the expansion of our franchise-restaurant base due to the sale of 452 company-owned restaurants to franchisees (refranchising) over the past year.

TAX RATE

The tax rates for the full year and fourth quarter, 2006 were better than anticipated. The low rate for the fourth quarter included the reversal of tax reserves in connection with our regular U.S. audit cycle, which we had communicated earlier this year, as well as other adjustments to prior years' accruals and reserves.

U.S. FRANCHISE OWNERSHIP UPDATE

As previously communicated during our analyst meeting on December 6, 2006, we extended our original two-year plan to sell approximately 1,000 company restaurants to franchisees during 2006 and 2007. Our current three-year plan, through 2008, is to sell approximately 1,500 company restaurants to franchisees, which will reduce company ownership to approximately 17% of the U.S. system. For the full year 2006, 452 company-owned U.S. restaurants were sold to our franchisees.

Our latest estimate for 2007 is cash proceeds from U.S. refranchising of $200 million. Operating-profit impact for the U.S. in 2007, due to refranchising activities, is expected to be about neutral. Our three-year program is targeted to produce total cash proceeds of $550 to $600 million, improvements in restaurant margin and ROIC, and an approximate neutral impact on U.S. operating profit.

FREE CASH FLOW

For full-year 2006, we generated a record $1.3 billion in Cash from Operating Activities and invested $614 million in capital in our businesses. Additionally, we generated $456 million in cash from refranchising, stock option proceeds and sale of excess properties. As a result, total free cash available totaled over $1.1 billion. More importantly, all three of our reporting segments continue to generate free cash flow.

In 2006, we again returned virtually all free cash available to our shareholders through share buy backs and quarterly dividends. Specifically, we returned a total of over $1.1 billion to our shareholders, that included significant share buy backs totaling $1.0 billion at an average price of $49.60, and $144 million returned through the quarterly dividends.

For 2007, we expect similar total payout levels to our shareholders through both significant share buy backs and dividends. As we announced December 5, 2006, we have doubled our quarterly dividend for the second-quarter 2007 payment from $0.15 to $0.30 per share.

YUM GROWTH MODEL AND 2007 OUTLOOK

Earnings Growth Model:

* China Division operating-profit growth of 20%. This growth is driven largely by development in mainland China measured by 20% system-sales growth and 375 new-restaurant openings.

* YRI Division operating-profit growth of 10%. This growth is driven by system-sales growth of at least 5% (unit and same-store-sales growth), with 750 new-restaurant openings.

* U.S. operating-profit growth of 5%. This growth is driven by 2% to 3% same-store-sales growth.

* EPS growth of at least 10%. This assumes operating profit from our three lines of business as previously noted with additional benefit from the reduction in shares outstanding due to substantial share buy backs.

Full-Year Outlook:

* Full-year 2007 EPS growth of at least 10%, or at least $3.21 per share.

* Profit growth from our combined international businesses is expected to be solidly double digit each quarter. In addition, full-year targeted U.S. sales and profit growth is expected to occur with solidly positive U.S. growth in the second half of 2007, offsetting a negative first quarter in the U.S.

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CONFERENCE CALL

Yum! Brands Inc. will host a conference call to review the company's financial performance and strategies at 9:15 a.m. EST Tuesday, February 13, 2007.

For U.S. callers, the number is 877/815-2029. For international callers, the number is 706/645-9271.

The call will be available for playback beginning at noon Eastern Time Tuesday, February 13, through 5 p.m. Friday, February 23. To access the playback, dial 800/642-1687 in the United States and 706/645-9291 internationally. The playback pass code is 5699345.

The call and the playback can be accessed via the Internet by visiting Yum! Brands' Web site, www.yum.com, and selecting "4th-Quarter Earnings Webcast."

For your added convenience . . . A podcast will be available within 24 hours of the end of the call at www.yum.com/investors.

ADDITIONAL INFORMATION ONLINE

Fourth-quarter restaurant-count details and definitions of terms are available online at

http://media.corporate-ir.net/media_files/irol/11/117941/ YumQ406Earnings.pdf. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Segment-results reconciliation is available online at

http://media.corporate-ir.net/media_files/irol/11/117941/ YumQ406Segment.pdf. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those identified by such words as may, will, expect, project, anticipate, believe, plan and other similar terminology. These "forward-looking" statements reflect management's current expectations regarding future events and operating and financial performance and are based on currently available data. However, actual results are subject to future events and uncertainties, which could cause actual results to differ from those projected in this announcement. Accordingly, you are cautioned not to place undue reliance on forward-looking statements. Factors that can cause actual results to differ materially include, but are not limited to, changes in global and local business, economic and political conditions in the countries and territories where Yum! Brands operates, including the effects of war and terrorist activities; changes in currency exchange and interest rates; changes in commodity, labor and other operating costs; changes in competition in the food industry, consumer preferences or perceptions concerning the products of the company and/or our competitors, spending patterns and demographic trends; the impact that any widespread illness or general health concern may have on our business and the economy of the countries in which we operate; the effectiveness of our operating initiatives and marketing, advertising and promotional efforts; new-product and concept development by Yum! Brands and other food-industry competitors; the success of our strategies for refranchising and international development and operations; the ongoing business viability of our franchise and license operators; our ability to secure distribution to our restaurants at competitive rates and to ensure adequate supplies of restaurant products and equipment in our stores; unexpected disruptions in our supply chain; publicity that may impact our business and/or industry; severe weather conditions; effects and outcomes of pending or future legal claims involving the company; changes in effective tax rates; our actuarially determined casualty loss estimates; new legislation and governmental regulations or changes in legislation and regulations and the consequent impact on our business; and changes in accounting policies and practices. Further information about factors that could affect Yum! Brands' financial and other results are included in the company's Forms 10-Q and 10-K, filed with the Securities and Exchange Commission.

Yum! Brands Inc., based in Louisville, Kentucky, is the world's largest restaurant company in terms of system restaurants with over 34,000 restaurants, which includes over 2,000 licensed restaurants, in more than 100 countries and territories. Four of the company's restaurant brands -- KFC, Pizza Hut, Taco Bell and Long John Silver's -- are the global leaders of the chicken, pizza, Mexican-style food and quick-service seafood categories respectively. Yum! Brands is the worldwide leader in multibranding, which offers consumers more choice and convenience at one restaurant location from a combination of KFC, Taco Bell, Pizza Hut, A&W or Long John Silver's brands. The company and its franchisees today operate over 3,400 multibrand restaurants. Outside the United States in 2006, the Yum! Brands' system opened about three new restaurants each day of the year, making it one of the fastest growing retailers in the world. For the past four years, the company has been recognized as one of Fortune Magazine's "Top 50 Employers for Minorities." It also has been recognized as one of the "Top 50 Employers for Women" by Fortune, one of the "40 Best Companies for Diversity" by Black Enterprise Magazine for the past two years, one of Black Enterprise Magazine's "30 Hottest Franchises for 2006, one of the "Corporate 100 Companies Providing Opportunities for Hispanics" by Hispanic Magazine, one of the "Top 50 Corporations for Supplier Diversity" by Hispanic Trends Magazine and by BusinessWeek as one of the "Top 15 Companies for In-Kind Corporate Philanthropy."

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