Yum!: Nears Conclusion of Strategic Review

Louisville / KY. (yb) Yum! Brands Inc. announced it is nearing conclusion of its strategic review, the appointment of Keith A. Meister to its Board of Directors, and updated its outlook for 2015.

The Company said its Board and management are close to concluding their thorough review of strategic options, including those related to the Company’s structure, and intend to communicate the outcome shortly.

«This has been a comprehensive, year-long process, working with our financial and legal advisors, and we are near its conclusion», said Greg Creed, Chief Executive Officer of Yum! Brands.

David Novak, Executive Chairman, Yum! Brands, said: «We are pleased to welcome to the Board one of our largest shareholders, Keith Meister, whose deep financial expertise will be invaluable to us as we conclude our disciplined review of our strategy and structure. The Yum! Board comprises a group of active and engaged directors, and we look forward to benefitting from Keith’s vast experience and his input prior to the conclusion of our review».

Meister is Founder and Managing Partner of investment fund Corvex Management LP. Corvex Management is one of Yum! Brands’ largest shareholders, holding nearly five percent of YUM’s common stock. His appointment was effective Friday, October 16, 2015.

Meister said, «We have had a constructive dialogue with the Board and management over the last several months. This is a company with multiple avenues for unlocking significant long-term value, and I look forward to working with the Board and management to expeditiously finalize a plan that we believe can deliver that value to shareholders».

With the election of Meister, the Yum! Brands Board of Directors expands to 14 members. Meister will be included in the Company’s slate of nominees for election to the Board at the 2016 Annual Meeting of Shareholders.

Updated Guidance

The Company also provided an updated outlook for full-year earnings per share and China Division same-store sales in its latest Form 10-Q. As part of the filing, the Company said:

Sales in China continue to be difficult to forecast due to ongoing volatility. Given that, we now estimate that China Division same-store sales for the fourth quarter could range from zero to four percent, with positive same-store sales growth at KFC and negative same-store sales at Pizza Hut Casual Dining. For the full year, China Division same-store sales are expected to be low-single-digit negative, and China Division operating profit is expected to be about flat to prior year, excluding the impact of foreign exchange.

Compared to our outlook as of our second-quarter earnings release, we now expect incremental foreign exchange headwinds to negatively impact our full-year EPS growth rate by one to two percentage points. Combining this with the revised China sales trends outlined above, we now expect our EPS growth, prior to Special Items, to range from about flat to low-single-digit positive for the full year.

To provide our investors greater visibility to sales trends in China, beginning with October and through the end of the year, we will report monthly same-store sales. We will release estimated October same-store sales for our China Division on November 12, 2015, after market hours.

About Keith A. Meister

Meister has been Managing Partner of Corvex Management LP since December 2010. Prior to founding Corvex, Meister served from 2002 to 2010 in a range of leadership roles within the organization headed by Carl C. Icahn, including as Chief Executive Officer and Vice Chairman of the general partner of Icahn Enterprises LP. Meister has previously served as a director of numerous other companies including: Williams Companies, Motorola Mobility, Motorola Inc., XO Holdings, Federal Mogul, American Railcar Industries, The ADT Corporation and Ralcorp Holdings Inc.

About Yum! Brands

Yum! Brands Inc., based in Louisville, Kentucky, has over 41’000 restaurants in more than 125 countries and territories. Yum! is ranked No. 228 on the Fortune 500 List with revenues of over 13 billion USD in 2014 and is one of the Aon Hewitt Top Companies for Leaders in North America. The Company’s restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken, pizza and Mexican-style food categories. Outside the United States, the Yum! Brands system opens over five new restaurants per day on average, making it a leader in international retail development (Image: KFC Germany).