We have a great China business with tremendous scale and economics, and our goal is to continue to build dominant China brands. We also have a very strong and profitable broad-based international business, which we continue to grow. We are focused on running great restaurants and, we are the worldwide leader of multibranding – combining two brands and greater consumer choice under one roof.

The Yum! China Division (includes mainland China, Thailand and KFC Taiwan), based in Shanghai, has been reported separately since the beginning of 2005 due to its size, unique strength and importance. Today our Yum! China Division has more than 2,000 system restaurants (Q1 2005).

Mainland China is our number one market for new company restaurant development worldwide. In 2004, operating profits for the China Division were more than $200 million and up over 20 percent. Our strategy is to be the leader in every significant food service category in mainland China. KFC is the number one quick-service restaurant brand and Pizza Hut is the number one casual dining brand in mainland China.

Yum! Restaurants International (YRI), based in Dallas, Texas, is the largest division of Yum! Brands with more than 11,000 restaurants outside the U.S. (excluding Yum! China Division). In each of the last five years, YRI has opened over 700 new restaurants. In 2004, YRI achieved record revenues of $2.1 billion, operating profits of $337 million and a continued high level of return on invested capital.

Outside the United States in 2004, our system opened about three new restaurants each day of the year making us one of the fastest growing retailers in the world. We have a large, growing, profitable, high-return international business and a strong growth opportunity with two global brands, KFC and Pizza Hut.

We are the worldwide leader in multibranding, offering consumers more choice, convenience and value at one restaurant location from a combination of two of our great brands under one roof. Today we have over 2,900 company and franchise-owned multibrand restaurants worldwide.

Yum!'s formula for success is centered on putting people capability first because when we do that, we satisfy our customers and generate more profits.

Around the world, our 850,000 Customer Maniacs are striving each and every day to put a Yum! on our customers' faces around the world. We've been on a journey for the past three years and are training our team members once a quarter on how to be Customer Maniacs.

We're building an operating culture dedicated to 100% CHAMPS with a Yes! Attitude. CHAMPS is centered on the executional basics that deliver great customer service including Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed. Our focus is to execute CHAMPS with passion, urgency and excellence, so that we will drive same store sales growth in every restaurant.

Yum! Brands has been recognized in BLACK ENTERPRISE Magazine as one of the “30 Best Companies for Diversity” and for the past two years, in FORTUNE's top 50 “Best Companies for Minorities,” claiming the number-one spot for “managerial diversity.” In 2004, Yum! jumped 20 spots to place 15th out of 50 on FORTUNE's list.

In addition, Yum! also has been named the #1 company for Work/Life Balance in Louisville, one of the Best Places to Work in Kentucky and Pizza Hut has been named the #1 Best Place to Work in Dallas. We are very proud of these accomplishments because they reflect Yum’s commitment to diversity and to making the company a great place to work.