Welcome to the Yum! China Experience

Tim JerzykVice President, Investor Relations

Introduction

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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. Factors that can cause actual results to differ materially include 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, 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 advertising and promotional efforts; new-product and concept development by Yum! Brands and other food-industry competitors; the success of our refranchising strategy; the ongoing business viability of our franchise and license operators; our ability to secure alternative distribution to our restaurants at competitive rates and to ensure adequate supplies of restaurant products and equipment in our stores; publicity that may impact our business and/or industry; severe weather conditions; effects and outcomes of legal claims involving the company; changes in effective tax rates; our actuarially determined casualty loss estimates; changes in legislation and governmental regulations; 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.

Information herein is as of February 1, 2005

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Chairman,CEO

ChinaDivision

InternationalDivision Taco Bell Pizza Hut KFC

Long John Silver’s/

A&W----------

Multibranding

2004 F

China’s Results & Potential Brought “Division” Status

$200+ millionOp Profit

350+ New Units

NEW

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China Headlines the Yum! Growth Story

4Multibrand

GREATBrands

3Run

GREATRestaurants

2Drive PROFITABLE

InternationalGrowth

1Build Dominant

CHINABrands

11Build DominantBuild Dominant

CHINACHINABrandsBrands

Sam SuPresident, Yum Restaurants China

Build Dominant Brands in China

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YUM! CHINA

YUM! U.S.A.

U.S. Population:290 million

China’s Urban Consumers: 500 million

Despite Success, a Big Opportunity Remains

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“To become the best restaurant company not only in China but the world.”

Yum! Restaurants China

Team Mission Statement

At PepsiCo Spin-off (October 1997)

And Deserves a Big Goal

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Key Decisions Stand Out in China’s Success

Moved KFC: Mainstream QSR positioning

Grew people capability ahead of the business

Invested early in distribution capability

Spread KFC to many cities

Pizza Hut: 5 star experience at 3 star price

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Accelerating but Focused on Profitability Always

New System Restaurant Openings Operating Profit($million)

39 56 63

120161

206

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

128167

266302 302

354

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

39% CAGR

Includes mainland China, Thailand, KFC Taiwan

Record Openings

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Leadership: 17 Years in the Making

“Life is tastier with KFC”

AUV = $1.2 million

“Happy Moments at Pizza Hut”

AUV = $1.1 million

#1 QSR #1 Casual Dining

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With a Sustainable Competitive Advantage

Outstanding Tenured Team– on the ground in Shanghai

Brand Positioning & Menu Vision

Nationwide Distribution System - Yum controls

Unit Economics that support expansion

Largest Retail Development capability

$60+ million G&A commitment– more when factoring in our partners

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Neither Satisfied nor Finished

Pizza Hut Home Service Taco Bell Grande

East Dawning

Angela LohChief Marketing Officer

Yum! Restaurants China

Brand Building

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Category Leaders

“Life is tastier with KFC”

AUV = $1.2 million

“Happy Moments at Pizza Hut”

AUV = $1.1 million

#1 QSR #1 Casual Dining

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Brand Outperforms Competition in Key Attributes

Food-related attribute has strongest correlation with overall satisfaction

KFC achieves a “win” on 6 of top 7 highest correlated attributes

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World Class Operations

Building a Big Brand at KFC

Community Involvement

In-Store Experience

Menu designed for Broad Appeal

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New Product Pipeline Support All Categories

Permanent offerings and limited-time-only news

Balanced across all daypartsBreakfast

Core eating occasions (lunch, dinner balance)

Snacks, desserts

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Community Involvement, not Gimmicks

First Light FoundationAwarding scholarships, building schools

Chicky school program

3-on-3 Basketball tournamentYear 1 — 9,000 teams in over 150 cities!

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Staying Ahead of Trends

Balanced Eating and Lifestyle

Health and Nutrition Council

Health and Nutrition White Paper

Health and nutrition leaflet

Grassroots sports program

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World Class Operation

Pizza Hut, Casual Dining’s Leader

Communication

Complete casual dining experience

Menu structure

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PH Menu Design Strategy

Pizza-centric sharable Food

Complete casual dining experience

Appetizer, soup, salad & dessert

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Complete Casual Dining Experience

Upscale décor package

With 5-star feel

Event driven in-store activities

Tailored daypart menu design

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Inspiring Communication

Escape from daily routine/ordinary

Festival/holiday fun moment

Exotic/interesting

Lily HsiehChief Support Officer

Yum! Restaurants China

Supply and Distribution Capability

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Supply Chain and Logistics a Core Strategy for China

Supply Chain Management Logistics

ProcurementVendor DevelopmentQuality Control

DistributionWarehousing

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A Capability 17 Years in the Making

HUGE barriers to overcome

No history of QSR

Supply chain nonexistent

Low standards

Challenging logistics

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Invested Early in Building a Supply Chain

Started in-house capability

Trained and developed suppliers

Introduced standards

A foundation ready for scale growth

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9320

28

42

47

50280

’00 ’01 ’02 ’03 ’04

Be Where the Stores Are and Will Be

Supporting rapid business growth

Across all brands

Across expanding menus

Across all of China . . .

Cities with KFC Restaurants

Day 1 ’00 Now

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Processed food, packaging

Premiums

Decor

Equipment Vehicles

We Manage the Vast Majority of Spend in China

Poultry

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Strong Vendor Development Process

Only Yum! qualified suppliers

Up-front audits ensure Yum! standards met

Regular audits, annually at a minimum

Refresh supply-base pool, evaluate new vendors

Standards reinforced at 3 levels: Gov’t, Industry, Yum!

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Large-Scale Supply Base

# Suppliers 550 +

# SKUs 4,000 +

Annual spend $400 million +

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Building Logistics Capability Another Long Journey

Why we do it ourselves . . .

No qualified third-party provider

Recent entrants yes, but manufacturing focused

Three-temperature requirement – dry, chilled, frozen

Challenge of serving 1,000s of drop-off points

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Logistics a Capability that Enables Rapid Growth

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Xingjiang

Tibet

Qinghai

Sichuan

Yunnan

Guizhou

Guangxi

Hainan

Guangzhou

Gansui

Ningxia

Shanxi

Inner Mongolia

Hunan

Hubei

Jiangxi

Fujian

Zhejiang

Taiwan

Henan

Anhui

Jiangsu

Shanxi ShandongHebei

Tianjin

BeijingLiaoning

Jilin

Heilongjiang

Shanghai

20+ Warehouses

Broad Coverage, Followed Growth in Inland Provinces

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Going Forward

Continuous fine tuning

Even stronger supplier partnerships

Even stronger logistics infrastructure

World class restaurant sourcing and distribution

Charles JemleyChief Financial Officer

Yum Restaurants China

Development Capability

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Rapid Expansion Story Will Continue

Category-leading, sought after Brands

Unit economics delivering excellent returns

Unrivaled Development capability

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At KFC, Full Speed Ahead

New-unit volumes: U.S. $1 million

Cash investment significantlysignificantly below U.S. levels

New-store margins at today’s standard or better

Great returns

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New-Unit AUVs Have Stabilized

80%

88%

100% 100%

’01 ’02 ’03 ’04

KFC New-Unit AUVs vs. Previous Year’s Openings

New Builds 151 226 230 284

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Not Just a Big-City Story — Even Penetration

’02 ’03 ’04

% of New Builds by Tier

58 % 57 % 53 %Tier 1, 2

Tier 3

Tier 4Tier 5Tier 5 10 %

17 %

20 %

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Big Cities, “Small Cities” Same Results

102%109%

115%

90%

Tier 2 Tier 3 Tier 4 Tier 5

AUVs vs. Tier 1 Standard

Ratio to Req’d return 2.4x 2.5x 3.0x 2.6x

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Impact from Expansion Used to Our Advantage

Built into our economic model, strategically applied

Build adjacent units to relieve pending capacity constraints Optimize service levels

Operations teams ready for growthHigh post-launch sales retention

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Rigor Every Step of the Way

Market mapping and trade-zone identification

Site selection and acquisition

Project approval

Construction and opening

Post-opening analysis

Feedback loop, huge catalog of learning

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Slightly Different Twist at Pizza Hut

Deeper in big markets firstPace of acceptance and scale

Thoughtfully entering “Up and Coming” markets

No credible competition on the horizon

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Unequaled Resource Commitments

Today . . . 400+ development professionals on the groundLargest in China by far

Extensive people development programsBuilding technical expertise and market knowledge

Incentive programs extract the best out of our teamsDevelopment and operations inextricably tied to each other

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Well on Our Way Towards Commitments

10+Pizza Hut Home Delivery

375+Yum! China Division

?Other Segment(s)

?Taco Bell Grande

25+Pizza Hut Restaurants

330+KFC

New Restaurant Openings‘05 F