Good morning. My name is Zitania and I will be your conference operator today. At this time, I would like to welcome everyone to the Yum! Brands Q4 2018 Earnings Release Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. Now, I would like to turn the call over to your host, Mr. Keith Siegner, Vice President, Investor Relations, Corporate Strategy and Treasurer. Sir, you may begin your conference.

Thanks, Zitania. Good morning, everyone, and thank you for joining us. On our call today are Greg Creed, our CEO; David Gibbs, our President, Chief Operating Officer and Chief Financial Officer; and Dave Russell, our Senior Vice President and Corporate Controller. Following remarks from Greg and David, we'll open the call to questions. Before we get started, I'd like to remind you that this conference call includes forward-looking statements. Forward-looking statements are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. In addition, please refer to the Investors section of the Yum! Brands' website, www.yum.com, to find disclosures and reconciliations of non-GAAP financial measures that may be used on today's call. Please note the following regarding our basis of presentation for today's call. First, system sales results exclude the impact of foreign currency. Second, core operating profit growth figures exclude the impact of foreign currency and special items. And third, the revenue recognition accounting standard was prospectively adopted on January 1. As a reminder, this is a GAAP required change adjusting the timing of recognition of upfront fees received from, and incentive payments made to. franchisees, the effects of which have no impact on cash. In addition, it requires the gross-up of revenues and offsetting expenses of advertising funds we consolidate within our income statement. We are broadcasting this conference call via our website. This call is also being recorded and will be available for playback. Please be advised that if you ask a question, it will be included in both our live conference and in any future use of the recording. We'd like to make you aware of the following changes in upcoming Yum! investor events. Disclosures pertaining to outstanding debt in our restricted group capital structure will be provided at the time of the Form 10-K filing. First quarter 2019 earnings will be released on May 1, 2019, with the conference call on the same day. And, last, we ask that you ask one question and one question only. Now, I'd like to turn the call over to Mr. Greg Creed.

Thank you, Keith. And good morning, everyone. It's been a little over two years since we announced a substantial transformation of Yum! Brands and I couldn't be more proud of what we've been able to accomplish since then. Focus on our four growth drivers, increased collaboration and a new mindset are clearly fueling improved results. In aggregate, for the year, Yum! delivered system sales growth of 5%, with 2% same-store sales growth and 4% net new unit growth excluding Telepizza units. Additionally, 2018 was a year of significant milestones in bold restaurant development. We now have over 48,000 restaurants in approximately 270 brand country combinations. Together, with our world-class franchisees, we opened on average 8 gross restaurants per day. Or in other words, one restaurant every three hours. As for the fourth quarter, I'm thrilled to share details of such a strong finish to a solid year. Items to note include a tremendous quarter at Taco Bell where same-store sales grew 6%, another impressive quarter at KFC where same-store sales grew 3% and a continued slow and steady improvement at Pizza Hut US with 1% same-store sales growth. Now, into the final year of our transformation, we continue to focus on our four key drivers to accelerate growth. As usual, David and I will talk you through the lens of these four key growth drivers. I'll provide an update on our distinctly relevant and easy brands, as well as unrivaled culture and talent. Then David will discuss bold restaurant development and unmatched franchise operating capability. He will also discuss our 2018 results, 2019 guidance and progress towards our transformation commitments. I’ll begin with our three distinctive, relevant and easy brands. In the fourth quarter, KFC division delivered system sales growth of 7%, with same-store sales growth of 3% and net new unit growth of 5%. For the year, systems sales grew 6%, with 2% same-store sales growth and 5% net new unit growth. The unit growth in 2018 exceeded our expectations, delivering a record 1,134 net new units this year. This achievement in unit growth was broad-based with particular strength in China, Russia, Asia, Latin America and Central and Eastern Europe. KFC also saw widespread contribution to its 3% sales growth in the fourth quarter, with notable strength in markets like Africa, China and Iberia. Africa continued to deliver results with 7% same-store sales growth in the quarter. This sustained momentum is the result of intense focus on value, backed by the introduction of the Zinger, an international fan favorite, and premium innovation like new Dunked Burger. In addition, China reported 3% same-store sales growth for the quarter. This stemmed from transactional-driving promotions like the Christmas Bucket and Crazy Thursday deals. And last, but not least, our Iberia market delivered 6% same-store sales growth in 2018. Campaigns based on consumer proximity, using delivery aggregators and that centered on the Mega Box Five Products for Five Euros drove the growth. Importantly, each of these markets grew same-store sales growth, while accelerating net new unit development. Iberia, for example, opened 35 net new units, a 26% increase in units year-over-year. Now, to the US where we finished 2018 with our fifth consecutive year of positive same-store sales growth. We started off the year with introduction by continuing our Taste of the South series with Smoky Mountain BBQ. We then followed this up with the debut of our Crispy Colonel Sandwich in April. In the fourth quarter, the team built on these platforms and debuted distinctive marketing and product innovation. The First, Southern-inspired Hot Honey Chicken was offered in a tenders basked or sandwich style. Second, and most notably, Chicken and Waffles featuring Mrs. Butterworth's syrup was a huge hit. KFC’s bold and cheeky marketing uniquely accentuated the delicious pairing to help KFC US deliver its strongest month of same-store sales growth for the year. With continued focus on value and innovation, we’re excited for what 2019 had in store for this always original brand. Moving on to our Pizza Hut division, which celebrated its 60th birthday in 2018 by reaching a milestone of over 18,000 restaurants worldwide. This was in part due to our strategic growth alliance with Telepizza. David will give you more details on the alliance in a few minutes. I want to note that we closed the transaction in December. And while there is no significant P&L impact on the quarter, certain Telepizza units were included in the Pizza Hut division restaurant count. In the fourth quarter, Pizza Hut division yielded system sales growth of 2%, with flat same-store sales growth and net new unit growth of 10% for the quarter or 2% excluding Telepizza units. For the year, system sales grew 1%, with flat same-store sales growth and 10% net new unit growth or 2% excluding Telepizza units. If you joined us during our investor and analyst day, we mentioned being proud of the foundational improvements we have made, but dissatisfied with the current system sales growth of our Pizza Hut division. For both the US and international business, sustainable improvements in sales growth will remain a slow build as we update and reposition the asset base and make the messaging more distinctive. International Pizza Hut systems sales grew 3% in the quarter due to a 5% net new unit growth, excluding Telepizza. We were pleased to see profits and same-store sales growth progress in the fourth ,quarter including in Mexico and Brazil. But, overall same-store sales were flat as dine-in sales continue to weigh on overall results. As we mentioned during the third quarter earnings call and in New York at our investor day, the gap between dine-in general sales and off-premise is significant, with both the US and international seeing a roughly 10 point differential. About 40% of our units outside of the US are dine-in restaurants, with predominantly dine-in sales and about half of these units are in China. We are leveraging best practices from our strongest international markets to provide targeted, alternative asset solutions. In 2018, we found success in our off-premise focused asset options, including Delcos, fast casual Delcos and express units. Combined, these modern off-premise focused restaurants represented 90% of total net new units in 2018, with particular success in India, Indonesia, Japan and Poland. The addition of nearly 1,300 Telepizza units will accelerate the transformation of our estate to a more off-premise focused asset base. In the US, systems sales increased 1% in the quarter, with 1% same-store sales growth and a net new unit decline of 1%. We’re encouraged by the operational foundation that's been put in place and continue to make strides to improve the brand’s position. Over the year, we acquired QuickOrder, our third-party online service provider. Running our own e-commerce platform will enable us to more quickly provide breakthrough products and convenience services to our customers that will allow for better franchise economics over the long-term. In the fourth quarter, Pizza Hut US continued its emphasis on value. The $5 lineup which features favorites like medium one top pizza, garlic knots, wings, and our new cinnamon mini rolls, helped improve traffic and provide the pipeline for future product innovation. Our partnership with the NFL has brought attention to these value concepts and improved the distinctiveness of our messaging. Pizza and sports go hand-in-hand and our partnerships with the players and teams should continue to bring the marketing to life. Now, on to Taco Bell, where 2018 marked our seventh consecutive year of positive same-store sales growth, once again outpacing the industry, a remarkable feat. Fourth-quarter system sales grew an impressive 9% with system sales growth of 6% and net new unit growth of 3%, a testament to the strength of their leadership team and partnership with their franchisees. During the quarter, we doubled down on value in the US, with double versions of customer favorites including the Triple Double Crunchwrap and Double Chalupa. Then fan favorite Rolled Chicken Tacos finished the quarter of strong. Taco Bell supported the quarter's value and innovation with distinctive brand moments as well, including celebrating our sixth annual Friendsgiving, with an exclusive dinner at our innovation center and launching the Taco Bell Taco Shop, our online retail channel that features some fantastic holiday themed swag that sold out in days. Both of these events generated top-tier media buzz. As we entered 2019, Taco Bell remains focused on being a category of one for everyone. In addition to a relentless commitment to value and innovation for which Taco Bell is known, in 2019, Taco Bell aims to make it even easier to assess for access with our customers. In fact, this morning, on the first anniversary of our strategic partnership with Grubhub, Taco Bell officially announced the national launch of Taco Bell delivery in over 4,000 restaurants across the US. Fans looking to enjoy their favorite menu items at home can jump on to TacoBell.com or go directly to grubhub.com or the Grubhub app to place their order. This launch is an important milestone on our journey to make the Taco Bell brand easier to access, and I want to thank the Taco Bell system and the Grubhub team for making this a reality. For Taco Bell International, there was a lot to be excited about as well. We took National Taco Day to more than 25 markets to generate awareness and drive sales. We leveraged US product innovation, like the Naked Chicken Taco in India and Korea and Naked Chicken Chips in the UK. We have solid local innovation like the Crispy Potaco in India and we even have delivery available in 15 markets and our testing kiosks in several countries. Unit growth is gaining momentum, with continued profitable growth in India, Spain and new markets like Peru. In the UK, development was also strong, including our first three stores in London where we announced our reentry into the market in a way only Taco Bell can with the help of Big Ben’s chimes. In 2018, our franchisees committed to over 1,100 international units under development agreements, augmenting our strong pipeline for future growth. This is only the beginning for Taco Bell International and I'm excited to see the brand grow and expand. Now, on to our unrivaled culture and talent. As you all recently saw, the Board of Directors and I unanimously decided to promote David Gibbs to president and chief operating officer. David is a longtime Yum! veteran and he’s been instrumental in shaping our global strategy, accelerating the pace of global new unit development, executing our transformation and laying a strong foundation for future growth. In his new role, he now has direct oversight of each of the brands with the brand leaders reporting to him. I couldn't be more pleased for David take on this role and I look forward to his continued contribution and leadership. David and I, along with the Board of Directors, have taken a fresh look at our structure and long-term bench as we continue to focus on accelerating our growth. Coming out of that review, we feel great about the level of talent we have throughout the global organization and have been very fortunate to be able to promote so many top leaders internally. This includes the recent promotions of Tony Lowings as CEO of KFC and Vipul Chawla as president of Pizza Hut International. Additionally, we made the decision to even further strengthen our bench and enhance talent as a competitive advantage for Yum! by investing in select new world-class talent. First, and as we've already announced, we’ll be hiring a CFO as David assumes his new duties. David will maintain his CEO responsibilities until a new CFO is in place. Second, with technology increasingly at the forefront of our strategic planning efforts and given its importance to all four of our growth drivers, we’ll also be hiring a new senior leader reporting to me who is focused on global, digital and technology strategy. This new role will lead to a coordinated cross brand global effort to better leverage technology, to drive sales and better economics for our franchisees. And finally, over the coming quarters, we’ll also be looking to opportunistically bolster our brand leadership teams. In conclusion, I'm proud of the work we are doing around the world, with world-class leaders focusing on our for key growth drivers to build a world with more Yum!. We remain confident as we lay the foundation of our transformation strategy to maximize shareholder value. And with that, it gives me great pleasure to introduce our President and Chief Operating Officer and Chief Financial Officer, David Gibbs.

Thank you, Greg. And good morning, everyone. Today, I'll discuss our full year and fourth quarter results, progress towards our transformation initiative and two of our four growth drivers – old restaurant development and unmatched franchise operating capability. First, our 2018 results. I'm thrilled that we met or exceeded each component of our guidance, particularly reaching the high end of the original range for net new unit growth, which I’ll talk about more in a few minutes. Our consolidated same-store and system sales growth rates improved throughout the year, ultimately achieving 2% and 5% respectively. In fact, I'd like to note that system sales growth ex-FX was 6% at KFC and 6% at Taco Bell, both impressive accomplishments. As a reminder, two items weighed on our core operating profit results. The timing mismatch between G&A savings and refranchising and the revenue recognition accounting standard change. As a result, and in line with our expectations, core operating profit growth for the full year was flat. As we anticipated, the second half of the year was better than the first. Fourth quarter system sales growth of 6%, same-store sales growth of 3% and core operating profit growth of 5%. Each a peak quarterly result for the year. Taco Bell was a major contributor to the quarterly improvement, with a 9% system sales increase driven by an impressive 6% same-store sales growth. Not to be left out, KFC, our largest division in units and profit contribution, ended the year on a high note with 3% same-store sales growth and 5% net unit growth, driving 7% system sales growth in the quarter. Before moving on, just a quick update on the impact of our Grubhub investment on EPS. Net for the full year, the mark-to-market of our Grubhub stock had a positive $0.03 impact. In the fourth quarter, the mark-to-market had a negative $0.41 impact. We’re very excited about our strategic partnership with Grubhub in the US and the national launch of delivery today with Taco Bell and later this year with KFC. We will continue to update you on the mark-to-market adjustments each quarter. Now, I’d like to discuss our guidance for full-year 2019. Consistent with our communications during our investor and analyst day in December, we anticipate net new unit growth of approximately 4% and same-store sales growth of 2% to 3%. Our full-year core operating profit growth guidance of low double digits is slightly above our longer-term algorithm for high single digit growth in 2020 and beyond. This upside is primarily a result of three factors. First, the rolloff of special media spending in 2018 due to the Pizza Hut transformation agreement. Second, rolloff of the KFC US acceleration agreement expenses. And third, the expected recovery of the KFC UK business. There is no change to our guidance from estimated run rate net capital expenditures of $100 million and G&A of 1.7% of system sales in 2019. Regarding our goal to deliver at least $3.75 in 2019 adjusted EPS, since we issued this guidance in 2016, we have seen continued strong performance at both KFC and Taco Bell, though clearly weaker than originally anticipated performance at Pizza Hut. Thus we remain on track to deliver this goal, owing to the benefits of our diverse portfolio. As a reminder, the $3.75 does not include any benefit from the 53rd week in 2019, the impact of changes in FX rates, any special items we might incur nor any gains or losses associated with our Grubhub investment. That said, I’d like to provide a little more color on two of these items. At this time, we estimate the benefit of the 53rd week to 2019, and on top of the $3.75% guidance, to be approximately $0.06. We also estimate the impact of FX rate movements to be a $0.04 headwind to the $3.75 figure. This is because rates have moved against us since we provided the original guidance in October of 2016. This estimated headwind is based on applying current forward rates to local currency forecasts, which will undoubtedly vary over time. We plan to update you on our FX estimates quarterly. Now, turning to our transformation initiatives to be more focused, more franchised and more efficient in order to deliver more growth to our shareholders. First, being more focused means we are maniacal about our four key growth drivers as they are the key to achieving our bold aspiration of 7% systems sales growth. Second, we are pleased to report we have reached our goal of becoming at least 98% franchised, with 856 company units as of the end of 2018. Putting this effort into context, from fourth quarter 2016 through 2018, we transferred over 2,300 units in exchange for $2.8 billion in pretax proceeds with over 160 individual deals to 3C franchisee partners who are excited about our future. These partners are committed to providing consistently bold value and our brand strategies, are capable, able to deliver great customer experience and operational standards and, finally, have capital both to grow new units and modernize existing assets. Third, we remain on track with our commitment to being more efficient, reducing G&A to 1.7% of systems sales in 2019 and run rate net CapEx of $100 million as I mentioned earlier. As for our goal to return $6.5 billion to $7 billion of capital to shareholders over the three-year period, 2017 through 2019, we remain firmly on track. During 2018, we repurchased 28 million shares for $2.4 billion at an average price less than $85. When combined with dividends, we have already returned $5.2 billion through the first two years of this program. Additionally, we are pleased to have recently announced our quarterly cash dividend of $0.42 for 2019, representing a 17% increase. While on the subject of capital, we’re very encouraged by the debt market support for our business model and capital structure. Despite broader market volatility during Q4, we successfully issued $1.45 billion in notes through our Taco Bell whole business securitization. As you know, the securitization market is just one of the multiple markets we access. The transaction was well received and over 2.5 times oversubscribed. It was upsized and reflects some of the tightest spreads ever obtained through a whole business securitization. Proceeds were used to refinance existing securitization debt and fund a portion of our capital return. Now, let’s discuss our growth drivers, beginning with unmatched franchise operating capability. At the KFC division, overall customer satisfaction scores increased by 3% during 2018. We have continued to invest in our franchise know-how by rolling our operations college across the globe to build capability. The taste of our food is a key differentiator for KFC. Therefore, we are increasing our focus on the role of the cook and enhancing standards around the core. And lastly, we are continuing to make it easier for our customers to enjoy original recipe through the continued rollout of click and collect kiosks and delivery. Our goal is to have 5,000 restaurants with kiosks and over 70% of our restaurants offering delivery by 2020. Just as promising, these enhancements are occurring at the same time our franchisees upgrade and modernize existing assets. At Pizza Hut US, the team and franchise partners have made improvements in three key areas of the customer experience. First, by delivering a hot fast and reliable pizza. We have improved our average delivery time by three minutes and increased customer satisfaction scores. Second, since the kickoff of Hut Rewards and updates to our mobile app in late 2017, we have been squarely in the digital game. We have over 12 million active users in the loyalty program and hope to be adding more as our off-line channel gains momentum. It’s an impressive achievement, considering we rolled out the program in the second half of 2017. Pizza Hut also announced during the fourth quarter that, for the first time ever, Hut Rewards members can earn points for in-store purchases. The brand truly doubled down last year with 2 points awarded for every dollar spent. At Taco Bell, Julie Masino is doing a fantastic job leading the US division and working with our franchise partners. Their focus on excellent execution is generating operating profit growth, while offering customers faster service and a better experience. In fact, the speed of service has improved three seconds at lunch and two seconds at dinner, Q4 year-over-year. Unlocking transactions and sales growth during peak service hours, which helped drive over 4 million additional transactions during the quarter. Their results show that our franchisees have really embraced our initiative of easy and we're excited for what 2019 holds for this cult favorite. Next, let’s talk about bold restaurant development. During 2018, we opened 3,021 gross restaurants and 1,758 on a net basis, excluding Telepizza, which I will talk about next. This is truly a step change in pace, representing an approximately 50% increase in net new unit growth from 2016. This is perhaps the clearest example of how focus and a new mindset, which you've consistently heard us discuss, can generate improved results. There is no single driver of the increase, but rather a holistic approach toward unlocking profitable franchisee-led development, supported by improved unit level economics. We’re very proud of the teams and franchisees that are making this happen and believe that, by leveraging our scale and expanding our capabilities, we can continue to improve franchisee unit economics, which we all know drives unit growth long-term. Before we move on to unmatched franchise operating capability, I want to give an update on our international growth alliance with Telepizza. This landmark deal places Pizza Hut in the number one position within the category across Latin America and Iberia in terms of unit count, confirming Pizza Hut's position as the world's largest pizza restaurant company. As the deal closed in December, it had no significant impact on our P&L in the fourth quarter. 1,282 Telepizza units are now included in our new master franchise agreement with Telepizza and are included in our overall unit count and have begun paying a fee to Pizza Hut. Of these stores, we anticipate between 100 and 150 may close due to overlap. Finally, there is an ancillary agreement for another 126 restaurants that are not included in the master franchise agreement. These non-MFA restaurants will effectively pay a small fee to Pizza Hut, but will not be included in the unit count unless and until they are converted to the Pizza Hut brand. Post-closing, our estate transformed to nearly 90% off-premise focused assets within the Telepizza regions. We are excited for what this means for development as Telepizza has agreed to add least 2,500 units to the alliance over the next 20 years. To summarize, the transformation we started in 2016 is already making Yum! a stronger company, franchisor and investment. We achieved our goal of 98% of restaurants being owned and operated by franchisees and they're on track to deliver our commitments for the transformation. With three category-leading brands, a uniquely diversified global business and over 48,000 restaurants, Yum! is well positioned to accelerate growth and improve franchise unit economics by leveraging our massive scale, expanding digital technology and delivery. We look forward to updating you throughout 2019. Now, the team and I are happy to take your questions.

[Operator Instructions]. And your first question comes from the line of Dennis Geiger of UBS.

Great, thanks for the question. David, congratulations on your promotion. Just wondering if you could just spend a bit more time talking about the accelerated unit growth potential for the business going forward? Another good quarter and good year of growth. Maybe just a bit more on the confidence going forward, which regions may be, to some extent, if you could talk high-level, that comes from – is it going to look a lot like it did in 2018? And just whether or not there are any other macro challenges and certain parts of the world had any kind of impact on your expectations? And then, I guess, just the last part of that, obviously, Telepizza just closing now. But just given the experience thus far, just checking in on your appetite to do more acquisition and conversions potentially in the future across brands. Thank you.

Well, thanks, Dennis. Yeah, I think, obviously, development is becoming a bigger and bigger part of the Yum! story. So, let me give you a little more color on it. Our guidance for 2019, as you know, is 4% as that's clearly the most likely outcome that we see. Embedded within that guidance as normal is tailwinds and possible headwinds. From a tailwind standpoint, and getting at your question about regions of growth, we are really encouraged by the fact that we're seeing widespread development. If you look back at years passed, a lot of our successful years in development, none of which reached the levels we reached this year, were driven by China. But this year, China has played a much smaller role in us achieving what is a record for Yum! on units. That's because, around the world, we are seeing good unit-level economics, which is driving our franchisees to build more stores. We're spending more time supporting them in this effort and making sure that we’re picking the right locations with more sophisticated market planning tools and being as efficient as possible with our capital spend. So, we've got some great tailwinds and as the development program is becoming more widespread and cuts across really just about every market that we operate in. As far as possible headwinds for 2019, we have this transition of the Pizza Hut dine-in estate to more of a delivery-focused estate and, obviously, that involves closing and opening stores. And during that churn, we may see more closures perhaps than we anticipated in the short-term at Pizza Hut. So, that's something as a possible headwind that we'll keep our eyes on. And then, I guess, the other possible headwind, for those of you who listened to the Yum China call, is their guidance for 2019 would imply a deceleration in unit development for them, although their guidance was consistent with their guidance from last year. So, another thing to just keep an eye on is the number of units coming out of Yum China. And then, I think there's a final point on development. Not considered in the guidance, likely not a big issue, is what I talked about with Telepizza. There's a potential for 100 to 150 units – that's our best guess right now – to close between Telepizza and Pizza Hut where there is overlap in a particular trade area. Obviously, there's going to be a lot more work that needs to be done to dig into that, identify exactly which stores would stay open and how that all plays out. But at the same time, I also highlighted there's 126 units that are not in our unit count today because they're not in the MFA, but our Telepizza stores that have the potential of being added to our unit count. So, those two things potentially could roughly offset each other. They're not really considered in the guidance. But as we learn more about those stores and the overlaps and the additions, we'll obviously update you on this quarterly call. As far as your final question on the Telepizza transaction and do we have more of those in the hopper, what I would say is we are really pleased with the Telepizza acquisition. The management of the Telepizza business is first class. We love having them now as our master franchisee in the Yum! world and we think that is a template for more deals that we can do. And we know that all of our brands are out there looking for deals like that. So, a lot of people that want to join the Yum! system and we hope to take advantage of that, be selective in adding the right people, but certainly something that we hope to have more news for down the road. I would just end on the development front by saying there's strong momentum in the business. Our tools for development are getting more and more sophisticated as we can parse data to figure out to where to put stores to be the most profitable, and it's widespread momentum. And as you've seen so far, the surprises tend to be on the upside. So, we're excited about development going into 2019.

Next question please.

Your next question comes from the line of Brian Bittner with Oppenheimer.

Thanks. Good morning. Can you just talk a little bit more about the strength in the Taco Bell business? The QSR industry trends just were not that strong in the third and fourth quarter, but Taco Bell is clearly a standout. Is your breakfast business performing exceptionally well? Is that where you're taking share? Or if you could just maybe describe again in more detail the pockets of strength in the Taco Bell business as you see it?

Yes. Sure, Brian. I think to reflect on what David said, this is the seventh year of positive same-store sales growth for Taco Bell. So, the success of Taco Bell has been in place for a long time. Obviously, we had an acceleration in the back half of the year. We had 6% same-store sales growth for the back half and, obviously, a 9% system sales growth is a great number to finish the year on. There's no silver bullet. That team, led by Julie Masino, is just doing a great job across the board. We are known as the value leader. We are known as the innovation leader. As David said, we're running great operations. The assets are in great shape. The franchisees like their restaurant-level margins. And so, I think when you add all that up, you just get a performance – a consistent performance for the seven years that Taco Bell has delivered and we believe will continue to deliver. So, the brand is in great shape. Even the delivery advertising which will launch today, I had a chance – we were at a Taco Bell a couple of weeks ago. I've seen all the marketing around the advertising supporting the Grubhub launch. It's as good as any work I've ever seen come out of Taco Bell. So, if we can accelerate our growth in delivery, I think that's all positive. So, they're just doing everything right led by a great executive team and a great president.

Your next question comes from the line of Chris O'Cull with Stifel. Chris O'Cull: Yes, thank you. My question relates to the Grub partnership. Greg, are there any differences in the consumer experience between Taco Bell because of their partnership with Grubhub compared to maybe other fast food chains that have relationships that aren't as close to their third-party provider? And then, also just wondering why KFC has been a little slower to rollout delivery than Taco Bell and whether you believe it can be as impactful to KFC as Taco Bell?

It’s like everything. You have to put the foundations in place before you let the, I guess, the horses loose. In this case, getting POS integration in place is really important. And so, obviously, we've spent a lot of time with Taco Bell and Grubhub getting the POS integration done. That's now complete and that's, obviously, why we're launching it. Working on the KFC team to make sure that integrated first. We don't want to go out and blow out without the integration because we know, with great integration, it improves speed of service, it improves order accuracy, it does everything that the customer wants. And so, you can say we've got a little slow. I would say we've gone a little slow early in order to accelerate going forward. So, I'm very excited about the launch day for Taco Bell. I'm very excited that more KFC restaurants will come onboard before the end of 2019. And all indications are, certainly in the early days, higher check, incremental transactions, all of that bodes well for both brands in the US.

Your next question comes from the line of Andrew Charles of Cowen and Company.

Thank you. And, David, congrats on a well-deserved promotion. I know you've talked about Telepizza's neutral impact expected to 2019 EPS, but can you walk us through the mechanics of this? Presumably the system sales will grow with roughly, as you finalize at 1,100, 1,200 new stores, is the expectation that this will be offset by a pronounced deterioration in the effective Pizza royalty rate or, separately, can we expect elevated franchise and license expenses or elevated G&A to lead to the EPS neutral impact?

The impact on profitability being neutral is really from the fact that we are contributing into this alliance some of our Pizza Hut's franchise stores today and, therefore, we're reducing the royalty we collect from those stores. So, we get less royalty from the stores we're contributing, we get the royalty from the stores that Telepizza is contributing, and effectively, from a rounding standpoint, it's neutral. We do think, long-term, it will be accretive because we think it will accelerate the rate of our growth. And to your question about G&A, obviously, most master franchise agreements, the master franchisor, in this case Telepizza, actually carries the G&A to manage the business. That's why we take a lower royalty. So, we don't expect any increase in our G&A. In fact, it would be the opposite. Our G&A over time will go down covering those areas as Telepizza gets up to speed on the business.

Thanks. Operator, we have time for one question.

Your final question comes from the line of Gregory Francfort of Bank of America.

Thank you. And just, David, can you talk about – as you've taken on the new responsibilities – what your key priorities will be and where you see the biggest opportunities for the business?

Yeah. As I shift to more of this President and Chief Operating Officer role, my priorities are the business priorities. We've transformed this business to being more a franchise business. Obviously, franchise unit economics are at the center of everything we do and I want to make sure that we're transitioning the way we approach the business, and we are seeing evidence of this everywhere we go, so it's not a concern. But I want to make sure we complete this journey to being a world-class franchisor, putting our franchisees, their unit economics, front and center at everything we do. So, I'll be spending a lot of time in the field with our field teams and with our franchise partners as I get up to speed in the new role in 2019 doing just that. I think the business is in great shape, obviously. I don't have an agenda for massive change. We are on the right path. And I think Greg and I and the entire Yum! and brand leadership teams are really excited about putting a bow on a good 2018 and moving into 2019 with some momentum. I'll turn it over to Greg now for just a few closing comments.

Thanks, David. So, first of all, I want to thank everyone for being on the call today. We are proud of what our teams and our franchisees accomplished in 2018. Combined, we opened up more than 300 more organic restaurants in 2018 than we did in 2017. We closed [indiscernible] transformative deals that should drive profitable system sales growth for our franchisees, Grubhub, Telepizza, QuikOrder. We made material progress on all of our 2016 transformation goals, including, as we have said, completing our refranchising program. I'm pleased to add that we closed out 2018 on a high note with Q4 being the best quarter of the year in terms of same-store sales growth, system sales growth, and core operating profit. So, heading into 2019, we remain confident we are going to deliver on becoming a more focused, more franchised, and more efficient, all of which will deliver more growth and further strengthen our powerful and unique business model. Thanks for joining us on the call today.

Thank you, everyone.

This concludes today's conference call. You may now disconnect.