Exhibit 99.1

Yum! Brands Inc. Reports First-Quarter 2008 EPS of $0.50 per share, 19% Growth Excluding Special Items; Raises Full-Year EPS Growth Forecast to 11% from 10%, Excluding Special Items

LOUISVILLE, Ky.--(BUSINESS WIRE)--Yum! Brands Inc. (NYSE: YUM) today reported results for the first quarter ended March 22, 2008.

First-quarter Earnings Per Share (EPS) of $0.50 included the benefit of a one-time gain from the sale of our minority interest in KFC Japan, and charges related to our long-term plan for U.S. brands transformation, including refranchising losses and charges related to business restructuring. Excluding these special items, EPS was $0.42 or 19% growth, which the company believes is a better indication of the underlying first-quarter performance.

FIRST-QUARTER HIGHLIGHTS

  First Quarter  
2008     2007 % Change
EPS $0.50 $0.35 +43
Less: Special Items1 $0.08 – NM
EPS Excluding Special Items $0.42 $0.35 +19

1 Special items of $0.08 include $100 million pre-tax gain from the sale of minority interest in KFC Japan, $26 million of U.S. refranchising pre-tax losses, and $6 million of pre-tax charges related to U.S. restructuring.

FULL-YEAR OUTLOOK

The Company raised its full-year 2008 EPS forecast from $1.85 to $1.87 per share or 11% growth. This is prior to full-year net gains from special items of up to $0.06 per share as previously announced in the Company’s full-year 2007 earnings release on February 4, 2008. Full-year EPS is expected to total up to $1.93, including all items.

David C. Novak, Chairman and CEO, said, “I am pleased to report a strong start to 2008 with first-quarter EPS growth of +19% excluding special items, led by outstanding operating-profit growth from our China and YRI businesses. The global growth we are achieving in China and YRI is among the best in the retail sector as we are driving robust same-store-sales growth, record-level new-unit development and excellent returns. In fact, we fully expect in 2008, for the eighth straight year, to open at least 1,000 new restaurants outside the U.S., reinforcing our position as the leading international retail developer. While our U.S. profits are being challenged by significant commodity pressure, we achieved 3% system same-store-sales growth, and we remain confident in the steps we are taking to position the U.S. brands for sustainable growth. Importantly, we continue to return significant cash to our shareholders. During the first quarter, we repurchased $1 billion of our shares at a price we believe created significant shareholder value. Overall, this quarter again highlighted the power of our global portfolio, and on the strength of our first-quarter results, we are raising our full-year EPS forecast to 11% growth, or $1.87 per share excluding special items.

“Shareholders should expect us to continue building consistent value by differentiating our portfolio of brands and driving profitable global expansion through our four key strategies that make us not your ordinary restaurant company: building leading brands in China in every significant category; driving aggressive international expansion and building strong brands everywhere; dramatically improving U.S. brand positions, consistency and returns; and driving industry-leading, long-term shareholder and franchisee value.”

CHINA DIVISION

 
($ million, except restaurant counts
and percentages) 		First Quarter   %
Change

2008

 

2007

Reported

 

Excl F/x

Traditional Restaurants-Mainland China (MLC) 2,640 2,202 +20 NA
KFC 2,201 1,881 +17 NA
Pizza Hut Casual Dining 362 273 +33 NA
Pizza Hut Home Service 59 39 +51 NA
System-Sales Growth % +38 +28
MLC system-sales growth % +40 +30
MLC Same-Store-Sales Growth % NA +12
Restaurant Margin % 21.3 22.9 (1.6) (1.7)
Operating Profit 101 76 +33 +23
 

CHINA DIVISION COMMENTS

YUM! RESTAURANTS INTERNATIONAL DIVISION (YRI)

 
($ million, except restaurant counts and percentages)   First Quarter   %
Change

2008

 

2007

Reported

 

Excl F/x

Traditional Restaurants 12,275 11,791 +4 NA
System-Sales Growth % +15 +9
Same-Store-Sales Growth % NA +5
Franchise & License Fees 145 121 +20 +14
Operating Margin % 20.0 17.4 +2.6 +2.3
Operating Profit 139 119 +18 +11
 

YRI DIVISION COMMENTS

UNITED STATES BUSINESS

   

($ million, except restaurant counts
and percentages)

First Quarter

2008

2007

 

% Change

Traditional Restaurants 17,919 18,050 (1)
Same-Store-Sales Growth %
System +3 (3) NM
Company +3 (6) NM
Franchisee Sales 3,052 2,932 +4
Company Sales 1,034 1,051 (2)
Franchise & License Fees 157 149 +5
Restaurant Margin % 12.4 13.3 (0.9)
Operating Margin % 13.2 13.8 (0.6)
Operating Profit 157 165 (5)
 

U.S. BUSINESS COMMENTS

SHAREHOLDER PAYOUTS

During the first quarter of 2008, we purchased 27.7 million shares at an average price of $35.39, or a total of $981 million, a quarterly record.

For 2008, we expect to return over $2 billion to shareholders through both dividends and significant share buybacks.

Q2 2008 UPDATE

YUM! ONGOING EARNINGS GROWTH MODEL

2008 First-Quarter End Dates       2008 Second-Quarter End Dates
 
International Division   2/25/2008 International Division   5/19/2008
China Division 2/29/2008 China Division 5/31/2008
U.S. Business 3/22/2008 U.S. Business 6/14/2008
 

CONFERENCE CALL

Yum! Brands Inc. will host a conference call to review the company’s financial performance and strategies at 9:15 a.m. ET Wednesday, April 23, 2008.

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 Wednesday, April 23, through midnight Friday, May 2. To access the playback, dial 800/642-1687 in the United States and 706/645-9291 internationally. The playback pass code is 39484056.

The call and the playback can be accessed via the Internet by visiting Yum! Brands’ Web site, www.yum.com, and selecting “1st-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

First-quarter restaurant-count details, definitions of terms, and segment-results reconciliation are available online at http://investors.yum.com/phoenix.zhtml?c=117941&p=irol-newsEarnings.

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 35,000 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 3,500 multibrand restaurants. Outside the United States in 2007, 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 three 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.”

 
 
Yum! Brands, Inc.

Consolidated Summary of Results

(amounts in millions, except per share amounts)

(unaudited)

 
 
    Quarter     % Change
3/22/08     3/24/07 B/(W)
Company sales $ 2,094 $ 1,942 8
Franchise and license fees   314     281   12
Total revenues   2,408     2,223   8
 
Costs and expenses, net
Food and paper 669 586 (14 )
Payroll and employee benefits 533 514 (4 )
Occupancy and other operating expenses   584     554   (5 )
Company restaurant expenses 1,786 1,654 (8 )

General and administrative expenses

276 262 (5 )
Franchise and license expenses 14 8 (81 )
Closures and impairment (income) expenses (2 ) 4 NM
Refranchising (gain) loss 25 (1 ) NM
Other (income) expense   (115 )   (20 ) NM
Total costs and expenses, net   1,984     1,907   (4 )
Operating profit 424 316 34
Interest expense, net   53     36   (45 )
Income before income taxes 371 280 33
Income tax provision   117     86   (37 )
Net income $ 254   $ 194   31

Effective tax rate

  31.6 %   30.6 % (1.0 ) ppts.

Basic EPS Data

EPS $ 0.52   $ 0.36   44
Average shares outstanding   486     533   9
 

Diluted EPS Data

EPS $ 0.50   $ 0.35   43
Average shares outstanding   504     551   8
 
Dividends declared per common share $ 0.15   $ —  
 

See accompanying notes.

 
 
Yum! Brands, Inc.

CHINA DIVISION Operating Results

(amounts in millions)

(unaudited)

 
 
    Quarter     % Change
3/22/08     3/24/07 B/(W)
 
Company sales $ 508 $ 331 53
Franchise and license fees   12     11   13
Revenues   520     342   52
 
Company restaurant expenses, net
Food and paper 190 119 (59 )
Payroll and employee benefits 69 43 (63 )
Occupancy and other operating expenses   141     94   (50 )
400 256 (56 )
General and administrative expenses 27 20 (31 )
Franchise and license expenses — — NM
Closures and impairment expenses — — NM
Other (income) expense   (8 )   (10 ) (20 )
  419     266   (57 )
Operating profit $ 101   $ 76   33
 
Company sales 100.0 % 100.0 %
Food and paper 37.4 36.1 (1.3

)

ppts.

Payroll and employee benefits 13.6 12.7 (0.9

)

ppts.

Occupancy and other operating expenses   27.7     28.3  

0.6

ppts.

Restaurant margin   21.3 %   22.9 % (1.6

)

ppts.

See accompanying notes.

China Division includes mainland China, Thailand and KFC Taiwan

As discussed in (e) in the accompanying notes, we began consolidating an entity in China, with 182 units, in which we have a majority interest on January 1, 2008. This entity was previously accounted for as an unconsolidated affiliate. For the quarter ended March 22, 2008 the consolidation of this entity increased Company sales by $46 million, Company restaurant expenses by $36 million, general and administrative expenses by $1 million and operating profit by $1 million while decreasing franchise and license fees by $3 million.

           
 
Yum! Brands, Inc.

INTERNATIONAL DIVISION Operating Results

(amounts in millions)

(unaudited)

 
 
Quarter % Change
3/22/08 3/24/07 B/(W)
 
Company sales $ 552 $ 560 (1 )
Franchise and license fees   145     121   20
Revenues   697     681   2
 
Company restaurant expenses, net
Food and paper 170 167 (2 )
Payroll and employee benefits 142 145 2
Occupancy and other operating expenses   168     175   4
480 487 1
General and administrative expenses 76 71 (6 )
Franchise and license expenses 4 3 (22 )
Closures and impairment (income) expenses (1 ) 4 NM
Other (income) expense   (1 )   (3 ) (85 )
  558     562   1
Operating profit $ 139   $ 119   18
 
Company sales 100.0 % 100.0 %
Food and paper 30.8 29.7 (1.1

)

ppts.

Payroll and employee benefits 25.7 25.9

0.2

 

ppts.

Occupancy and other operating expenses   30.5     31.3  

0.8

 

ppts.

Restaurant margin   13.0 %   13.1 % (0.1

)

ppts.

 
Operating margin   20.0 %   17.4 %

2.6

 

ppts.

 
See accompanying notes.
           
 
Yum! Brands, Inc.

UNITED STATES Operating Results

(amounts in millions)

(unaudited)

 
 
Quarter % Change
3/22/08 3/24/07 B/(W)
 
Company sales $ 1,034 $ 1,051 (2 )
Franchise and license fees   157     149   5
Revenues   1,191     1,200   (1 )
 
Company restaurant expenses, net
Food and paper 309 300 (3 )
Payroll and employee benefits 322 326 1
Occupancy and other operating expenses   275     285   4
906 911 1
General and administrative expenses 119 122 2
Franchise and license expenses 10 5 (92 )
Closures and impairment (income) expenses (1 ) — NM
Other (income) expense   —     (3 ) NM
  1,034     1,035   —
Operating profit $ 157   $ 165   (5 )
 
Company sales 100.0 % 100.0 %
Food and paper 29.8 28.4 (1.4

)

ppts.

Payroll and employee benefits 31.2 31.1 (0.1

)

ppts.

Occupancy and other operating expenses   26.6     27.2   0.6

 

ppts.

Restaurant margin   12.4 %   13.3 % (0.9

)

ppts.

 
Operating margin   13.2 %   13.8 % (0.6

)

ppts.

 
See accompanying notes.
       
 
Yum! Brands, Inc.

Condensed Consolidated Balance Sheets

(amounts in millions)

 
 
(unaudited)
3/22/08 12/29/07
ASSETS
Current Assets
Cash and cash equivalents $ 481 $ 789
Accounts and notes receivable, less allowance: $23 in 2008 and $21 in 2007 268 225
Inventories 130 128
Prepaid expenses and other current assets

197

142
Deferred income taxes 129 125
Advertising cooperative assets, restricted   95   72
Total Current Assets

1,300

1,481
Property, plant and equipment, net of accumulated depreciation and amortization of $3,420 in 2008 and $3,283 in 2007

3,807

3,849
Goodwill 661 672
Intangible assets, net 327 333
Investments in unconsolidated affiliates 33 153
Other assets 477 464
Deferred income taxes   308   290
Total Assets $ 6,913 $ 7,242
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities
Accounts payable and other current liabilities $ 1,468 $ 1,650
Income taxes payable 85 52
Short-term borrowings 312 288
Advertising cooperative liabilities   95   72
Total Current Liabilities 1,960 2,062
 
 

Long-term debt

3,372 2,924
Other liabilities and deferred credits   1,202   1,117
Total Liabilities   6,534   6,103
 
Shareholders’ Equity
Common Stock, no par value, 750 shares authorized; 473 shares and 499 shares issued in 2008 and 2007, respectively — —
Retained earnings 374 1,119
Accumulated other comprehensive income   5   20
Total Shareholders’ Equity   379   1,139
Total Liabilities and Shareholders’ Equity $ 6,913 $ 7,242
 

See accompanying notes.

       
 
Yum! Brands, Inc.

Condensed Consolidated Statements of Cash Flows

(amounts in millions)

(unaudited)

 
 

Quarter

3/22/08 3/24/07
Cash Flows – Operating Activities
Net income $ 254 $ 194
Depreciation and amortization 120 112
Closures and impairment (income) expenses (2 ) 4
Refranchising (gain) loss 25 (1 )
Gain on sale of interest in Japan unconsolidated affiliate (100 ) —
Deferred income taxes 19 (11 )
Equity income from investments in unconsolidated affiliates (11 ) (13 )
Excess tax benefit from share-based compensation

(9

) (12 )
Share-based compensation expense

15

14
Changes in accounts and notes receivable (3 ) (12 )
Changes in inventories 6 (4 )
Changes in prepaid expenses and other current assets

(5

) (6 )
Changes in accounts payable and other current liabilities

(53

) (35 )
Changes in income taxes payable 30 53
Other non-cash charges and credits, net  

62

    57  
Net Cash Provided by Operating Activities  

348

    340  
 
Cash Flows – Investing Activities
Capital spending (113 ) (93 )
Proceeds from refranchising of restaurants 19 34
Sales of property, plant and equipment 7 12
Other, net   3     5  
Net Cash Used in Investing Activities   (84 )   (42 )
 
Cash Flows – Financing Activities
Repayments of long-term debt (4 ) (2 )

Revolving credit facilities, three months or less, net

433 165
Short-term borrowings by original maturity
More than three months – proceeds — 1
More than three months – payments — (183 )
Three months or less, net 24 (11 )
Repurchase shares of Common Stock (994 ) (246 )
Excess tax benefit from share-based compensation

9

12
Employee stock option proceeds 12 28
Dividends paid on Common Stock   (75 )   (40 )
Net Cash Used in Financing Activities  

(595

)   (276 )

Effect of Exchange Rates on Cash and Cash Equivalents

  6     —  
Net Increase (Decrease) in Cash and Cash Equivalents (325 ) 22
Change in Cash and Cash Equivalents due to Consolidation of an Entity in China 17 —
Cash and Cash Equivalents - Beginning of Period   789     319  
Cash and Cash Equivalents - End of Period $ 481   $ 341  
 
See accompanying notes.
 
 
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 2008 on a basis before Special Items. Included in Special Items are the gain on the sale of our minority interest in our Japan unconsolidated affiliate, U.S. refranchising (gain) loss, charges relating to U.S. General and Administrative (“G&A”) productivity initiatives and realignment of resources, as well as investments in our U.S. Brands. These amounts are described in (f) and (g) 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. 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 2008 that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.
   
 
Quarter
3/22/08
Detail of Special Items
Gain of the sale of our interest in our Japan unconsolidated affiliate

$

(100

)
U.S. Refranchising (gain) loss 26
Charges relating to U.S. G&A productivity initiatives and realignment of resources 5
Investments in our U.S. Brands   1  

Total Special Items Income

(68 )

Tax on Special Items

  25  

Special Items Income, net of tax

$ (43 )

Average diluted shares outstanding

  504  

Special Items diluted EPS

$ 0.08  
 
Reconciliation of Operating Profit Before Special Items to Reported Operating Profit

Operating Profit before Special Items

$ 356

Special Items Income

  68  
Reported Operating Profit $ 424  
 
Reconciliation of EPS Before Special Items to Reported EPS
Diluted EPS before Special Items $ 0.42
Special Items EPS   0.08  
Reported EPS $ 0.50  
 
 

Notes to the Consolidated Summary of Results, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows

(amounts in millions, except per share amounts)

(unaudited)

 
 
(a) Percentages may not recompute due to rounding.
 
(b) Amounts presented as of and for the quarter ended March 22, 2008 are preliminary.
 
(c) On May 17, 2007, the Company announced that its Board of Directors approved a two-for-one split of the Company’s outstanding shares of Common Stock. The stock split was affected in the form of a stock dividend and entitled each shareholder of record at the close of business on June 1, 2007 to receive one additional share for every outstanding share of Common Stock held. The stock dividend was distributed on June 26, 2007, with approximately 261 million shares of Common Stock distributed. All per share and share amounts in the accompanying Consolidated Summary of Results and Condensed Consolidated Balance Sheets have been adjusted to reflect the stock split.
 
(d) China Division Other (income) expense includes equity income from our investments in unconsolidated affiliates. In the quarter ended March 22, 2008, Unallocated Other (income) expense includes the pre-tax gain on the sale of our unconsolidated affiliate in Japan (see Note f).
 
(e)

On January 1, 2008 we began consolidating an entity in China in which we have a majority interest. This entity was previously accounted for as an unconsolidated affiliate. For the quarter ended March 22, 2008 the consolidation of this entity increased Company sales by $46 million, Company restaurant expenses by $36 million, G&A expenses by $1 million and Operating Profit by $1 million (net of a minority interest of $2 million) while decreasing franchise and license fees by $3 million. Our Condensed Consolidated Balance Sheet at March 22, 2008 reflects the consolidation of this entity; with Investment in unconsolidated affiliates reduced, the entity’s balance sheet consolidated and a minority interest reflected in Other liabilities and deferred credits.

 
(f) During December 2007, we sold our interest in our unconsolidated affiliate in Japan for $128 million in cash (includes the impact of related foreign currency contracts that were settled in 2007). Our international subsidiary that owned this interest operates on a fiscal calendar with a period end that is approximately one month earlier than our consolidated period close. Thus, consistent with our historical treatment of events occurring during the lag period, the pre-tax gain on the sale of this investment was recorded in the quarter ended March 22, 2008 as other income and was not allocated to any segment for reporting purposes. However, the cash proceeds from this transaction were transferred from our international subsidiary to the U.S. in December 2007 and were thus reported on our Consolidated Statement of Cash Flows for the year ended December 29, 2007. Additionally, this transaction has been reflected as a Special Item for certain performance measures (see accompanying reconciliation to reported results). Our Investment in unconsolidated affiliates decreased as a result of the sale of our unconsolidated affiliate in Japan.
 
(g) As part of our plan to transform our U.S. business we are taking several measures in 2008 that we do not believe are indicative of our ongoing operations. These measures include: expansion of our U.S. refranchising, potentially reducing our Company ownership in the U.S. to below 10% by the year end 2010; charges relating to G&A productivity initiatives and realignment of resources (primarily severance and early retirement costs); and investments in our U.S. Brands made on behalf of our franchisees such as equipment purchases. We have traditionally not allocated refranchising (gains) losses for segment reporting purposes and will not allocate the costs associated with the productivity initiatives, realignment of resources and investments in our U.S. Brands to the U.S. segment. Additionally, these items have been reflected as Special Items for certain performance measures (see accompanying reconciliation to reported results).

CONTACT:
Yum! Brands, Inc.
Analysts:
Tim Jerzyk, 502-874-8006
Senior Vice President, Investor Relations/Treasurer
or
Pat Grismer, 502-874-8320
Vice President Investor Relations/Corporate Strategy
or
Quan Nghe, 502-874-8918
Director Investor Relations
or
Media:
Amy Sherwood, 502-874-8200
Vice President Public Relations