1、On The Ground Floor of Global GrowthBuilding The Defining Global Company That Feeds the WorldYum! Brands 2010 Annual Customer Mania ReportFinancial Highlights (In millions, except for per share amounts)Year-end 2010 2009 % B/(W) changeCompany sales $ 9,783 $ 9,413 4 Franchise and license fees and in
2、come 1,560 1,423 10 Total revenues $ 11,343 $ 10,836 5 Operating Profit $ 1,769 $ 1,590 11 Net Income Yum! Brands, Inc. $ 1,158 $ 1,071 8 Diluted Earnings Per Common Share before Special Items (a) $ 2.53 $ 2.17 17Special Items Earnings Per Common Share (a) (0.15) 0.05 NMReported Diluted Earnings Per
3、 Common Share $ 2.38 $ 2.22 7 Cash Flows Provided by Operating Activities $ 1,968 $ 1,404 40 (a) See page 29 of our 2010 Form 10-K for further discussion of Special Items.Average US Sales per System Unit (a) (In thousands) Year-end 2010 2009 2008 2007 2006 5-year growth (b)KFC $ 933 $ 960 $ 967 $ 99
4、4 $ 977 Pizza Hut 855 786 854 825 794 1%Taco Bell 1,288 1,255 1,265 1,147 1,178 2%(a) Excludes license units. (b) Compounded annual growth rate.ContentsDear Partners .1Winning Big in China! .45Building Strong Brands Everywhere .67Improving US Brand Positions .89Driving Long-Term Shareholder Value.10
5、ABouT The pApeR useD foR This RepoRT The inks used in the printing of this report contain an average of 25% - 35% vegetable oils from plant derivatives, a renewable resource. They replace petroleum based inks as an effort to also reduce volatile organic compounds (VOCs).The cover and first 14 pages
6、of this report were printed using FSC-certified paper made with 50% recycled content including 24% post-consumer waste.Board of DirectorsDavid C. Novak 58 Chairman, Chief Executive Officer and President, Yum! Brands, Inc.Jing-Shyh S. (“Sam”) Su 58 Vice Chairman, Yum! Brands, Inc. Chairman and Chief
7、Executive Officer, Yum! Restaurants ChinaDavid W. Dorman 57 Non-Executive Chairman, Motorola Solutions, Inc.Massimo Ferragamo 53 Chairman, Ferragamo USA, Inc., a subsidiary of Salvatore Ferragamo ItaliaJ. David Grissom 72 Chairman, Mayfair Capital, Inc. and Chairman, The Glenview Trust CompanyBonnie
8、 G. Hill 69 President, B. Hill Enterprises, LLCRobert Holland, Jr. 70 Managing Director and Advisory Board Member, Essex Lake Group, P.C.Kenneth Langone 75 Founder, Chairman, Chief Executive Officer and President, Invemed Associates, LLCJonathan S. Linen 67 Advisor to Chairman, American Express Comp
9、anyThomas C. Nelson 48 Chairman, Chief Executive Officer and President, National Gypsum CompanyThomas M. Ryan 58 Chairman of CVS Caremark Corporation and CVS Pharmacy, Inc.Robert D. Walter 65 Founder and Retired Chairman/CEO, Cardinal Health, Inc.Senior OfficersDavid C. Novak 58 Chairman, Chief Exec
10、utive Officer and President, Yum! Brands, Inc.Jing-Shyh S. (“Sam”) Su 58 Vice Chairman, Yum! Brands, Inc. Chairman and Chief Executive Officer, Yum! Restaurants ChinaGraham D. Allan 55 Chief Executive Officer, Yum! Restaurants InternationalScott O. Bergren 64 Chief Executive Officer, Pizza Hut U.S.
11、and Yum! Innovation, Yum! Brands, Inc.Jonathan D. Blum 52 Senior Vice President, Chief Public Affairs Officer, Yum! Brands, Inc.Emil J. Brolick 63 Chief Operating Officer, Yum! Brands, Inc. and President of LJS/A&WAnne P. Byerlein 52 Chief People Officer, Yum! Brands, Inc.Christian L. Campbell 60 Se
12、nior Vice President, General Counsel, Secretary and Chief Franchise Policy Officer, Yum! Brands, Inc.Richard T. Carucci 53 Chief Financial Officer, Yum! Brands, Inc.Greg Creed 53 Chief Executive Officer, Taco BellRoger Eaton 50 Chief Executive Officer, KFC U.S. and Yum! Operational Excellence, Yum!
13、Brands, Inc.W. Lawrence Gathof 49 Vice President and Treasurer, Yum! Brands, Inc.Patrick Grismer 49 Chief Planning and Control Officer and Senior Vice President, Yum! Brands, Inc.Timothy P. Jerzyk 58 Senior Vice President, Investor Relations Yum! Brands, Inc.Muktesh (“Micky”) Pant 56 President, Yum!
14、 Restaurants International and President Global Branding, Yum! Brands, Inc.David E. Russell 41 Vice President - Corporate Controller, Yum! Brands, Inc.David C. Novak Chairman & Chief Executive Officer Yum! Brands, Inc.To this end, we have clearly established an ability to deliver consistently strong
15、 results, even in the extremely challenging economic and macro environment we continue to face. As a matter of fact, in 2010 we achieved 17% Earnings Per Share (EPS) growth, excluding special items, representing the ninth straight year that we exceeded our annual target of at least 10%. In fact, 17%
16、 EPS growth is our best in the last decade and what makes this even more impressive is that it was driven by a 15% increase in operating profit prior to foreign currency translation, including gains across all three of our business divisions. As I look back on the past year, Im really proud of what
17、we accomplished. We grew worldwide system sales by 4%, prior to foreign currency translation, and once again proved to be one of the leading retail developers of units outside the United States as we opened nearly 1,400 new units, the tenth straight year weve opened more than 1,000 new units. At the
18、 same time, we are making major progress building incremental dayparts and sales layers in each of our businesses. We also improved worldwide restaurant margins by 1.3 percentage points, and operating profits grew 15%, prior to foreign currency translation and special items, generating $1.16 billion
19、 in net income and nearly $2 billion in cash from operations. Importantly, we continued to be an industry leader with Return on Invested Capital (ROIC) of 20%+. As a result, our share price jumped 40% for the full year. Over the longer term, we take special pride that our five year average total ret
20、urn, including stock appreciation and dividend reinvestment, is 18% versus the S&P average of 2%. Our strong cash flow generation, combined with our disciplined approach with deploying capital, allowed us to increase our dividend 19%, to an annual rate of $1.00 per share.But the most important point
21、 I want you to take away from this letter is that all our Companys leaders and teams know what we accomplished in the past is just that yesterdays newspaper. We clearly realize its up to us to write new headlines of winning performance. And as you read this report, I think you will have reason to sh
22、are our belief that even though weve made a lot of headway, we have barely scratched the potential of our opportunity and are on the ground floor of global growth. And we are going all out to attack it.Dear Partners, Im especially pleased to report 2010 was another year of significant progress towar
23、d achieving our future back vision to be THE DEFINING GLOBAL COMPANY THAT FEEDS THE WORLD. This is a goal that reflects our intentionality to lead the way in defining how to truly build a superlative global company, a company that sets the example others want to emulate. Of course, a bold and admitt
24、edly audacious goal like this has to be backed up by a track record of impressive performance. And, perhaps even more importantly, it has to be supported by an increasing capability and the potential to keep it going. First let me share with you how we intend to become the Defining Global Company Th
25、at Feeds The World. It starts with the fact we are already a truly global growth company, with approximately 65% of our profits coming from outside the United States, including commanding positions in China and the emerging markets. With our leading global brands, 1.4 million system wide team member
26、s around the world already operating in over 110 countries and territories, powered by a powerful financial capability, we have everything it takes to make it happen. Our intent is to continue to drive shareholder value and as we do, make the world a better place by building our company around three
27、 principles:Creating a famous recognition culture where everyone counts.We founded this company on the belief that the best way to get results is by having fun recognizing others and operating with a deep-seated conviction that everyone at every level can truly make a difference. Other companies are
28、 already best practicing Yum! for our culture, and the experiences we share are enriching lives. To keep building on this fundamental strength, we continue to drive what we call our How We Win Together principles featured on page 13. For example, our Presidents and General Managers have spent this p
29、ast year personally teaching all our Restaurant Support Center teams our “Achieving Breakthrough Results” tool kit and we are now in the process of rolling out the training to all our Restaurant General Managers and franchise partners. I believe this may be the single largest cultural cascade in bus
30、iness and Im certain it will drive our future success. Additionally, we have created an online network coined “iCHING” to leverage our scale and share best practices, creating explicit know how so we can get things done right the first time and accelerate speed to market. These initiatives are provi
31、ding a work environment that is proving to be a magnet to retain and attract the best talent, which we all know, is the name of the game. Building dynamic, vibrant brands everywhere with one system operational excellence as our foundation.Each of our brands make the world a better place by standing
32、for something unique and purposeful: Taco Bell is fuel for the pioneering spirit by offering unbelievable value; KFC creates joyful eating experiences because it tastes better than good; Pizza Hut promotes social interaction by creating favorite moments for you and the people you love to be around.
33、We have clear roadmaps to develop each of our brands. These “Plans to Breakthrough” call for differentiating our brands in everything we do with our people, service, products, assets and promotions. Going forward, I want you to know we are focused on taking breakthrough action to more consistently g
34、ive our customers a trusted, reliable experience, like we do in China. Frankly, we have relied too much on marketing to carry the freight in the past and have settled far too long in too many restaurants with marginal operations. This past year I made it my number one objective for us to build know
35、how from our best operators and renowned operating companies inside and outside our industry. As a result of our learnings, we have a new operating framework we will be executing around the world. We have declared that rigorous execution of our core processes to deliver brand standards is our number
36、 one brand building initiative. We realize we need to become a better operating Company and we will only achieve true greatness when our customers recognize the power of our culture through a positive Customer Mania restaurant experience. I promise you I will hold myself and our leaders accountable
37、for doing so and reward the doers.Being a company with a huge heart.This begins with the commitment and care we have for each other. Our careers open doors for thousands of people around the globe. We ensure everyone has individual development plans that help each person maximize their potential and
38、 achieve their goals. Whats more we truly care about the world. That means not only feeding the world our great food, but also using our talent, time and imaginations to save the lives of people who are at risk of starvation in remote corners of the world as we continue to build on our partnership w
39、ith the United Nations World Food Programme. Our annual hunger relief campaigns have raised nearly $78 million in cash and donated food, and our people volunteered more than 6 million hours to hunger relief efforts last year alone. Check out our Corporate Social Responsibility Report published onlin
40、e at Y and you will see our brands and franchise partners do a lot of other good things in the communities we serve. A Defining Global Company will always focus on more than making money, and we are doing just that.Hopefully, that gives you a sense for how we intend to become The Defining Global Com
41、pany That Feeds The World. Now I want to segue to our four major growth strategies and give you an idea of why we are so confident that we are on the ground floor of global growth and the best is yet to come. Build Leading Brands Across CHINA In Every Significant Category.#1Our outstanding and exper
42、ienced local team led by our Vice Chairman of Yum! Brands and Chairman and Chief Executive Officer of Yum! Restaurants China, Sam Su, grew our profits a whopping 26% in 2010, prior to foreign currency translation, on top of 24% growth in 2009 and 17% in 2008. You dont need to be a math major (and Im
43、 not!) to easily calculate that our China operating profit has more than doubled in the last 3 years to $755 million, making it our Number 1 profit-producing Division in Yum! We expect it to become our first $1 billion profit business in the very near future. Our recipe for success is continued prof
44、itable new unit development and leveraging our existing assets with new dayparts and sales layers to grow same store sales. In 2010, we once again opened over 500 new restaurants, while delivering near-record margins of 22%. Our KFC business has been absolutely rock solid. We now have over 3,200 KFC
45、s in over 700 cities, with $1.4 million average unit volumes. KFC added 414 new locations in 2010 and we continue to see cash paybacks in less than 3 years on new restaurants. The good news is that our growth and results were driven by increased traffic as KFC made good progress leveraging its asset
46、s with 24-hour operations, delivery service and continuing to build a solid breakfast business. We also have 520 casual dining Pizza Huts in 130 cities that had a breakout year, generating double digit same store sales growth in every quarter in 2010. Additionally, operating profit grew 50% and Pizz
47、a Hut Casual Dining now generates well over $100 million in operating profit. With those tremendous results, our strategy is to scale up for significant growth ahead. We also continued to invest behind the development of our emerging brands. Pizza Hut Home Service now has 120 units in eleven cities,
48、 making pizza available with very efficient, low-investment pizza carryout units. We are even creating our own Chinese quick service restaurant chain, East Dawning, tailored to the local favorites based on the amazing insight that Chinese peoples favorite cuisine is, believe it or not, Chinese food!
49、 Consistent with this belief, we also own 27% of Little Sheep, the leading brand in the hot pot category, which has about 500 units and is the largest casual dining category in China with tons of potential. Our single biggest advantage is we have arguably the finest operating team in the world that
50、knows how to satisfy customers and make money. In fact, over 70% of our Restaurant General Managers have at least a college education, and as I like to say, the rest of them are just plain smart! This tremendous store level operating capability, combined with the fact that weve put in place a world
