Tim Jerzyk - Senior Vice President, Investor Relations David C. Novak - Chairman of the Board, President, Chief Executive Officer Richard T. Carucci - Chief Financial Officer

Analyst for David Palmer - UBS Joe Buckley - Banc of America Merrill Lynch John Glass - Morgan Stanley Keith Seigner - Credit Suisse Steven Kron - Goldman Sachs Mitchell J. Speiser - Buckingham Research John Ivankoe - J.P. Morgan Jeffrey Bernstein - Barclays Capital Analyst for Greg Badishkanian - Citi Thomas Forte - Telsey Advisory Group Jason West - Deutsche Bank Rob Wilson - Tiburon Research David Liebowitz - Horizon Capital Management Jeff Omohundro - Wells Fargo Securities

Good morning. My name is Rachel and I will be your conference operator today. At this time, I would like to welcome everyone to the Yum! Brand second quarter 2009 earnings conference call. (Operator Instructions) I would now like to turn the call over to Mr. Tim Jerzyk, Senior Vice President of Investor Relations and Treasurer. Sir, you may begin.

Thanks, Rachel. Good morning, everyone and thanks for joining us on the call. This call is being recorded and will be available for playback. We are broadcasting the conference call via our website at www.yum.com. 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. I would also like to advise that this conference call includes forward-looking statements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information in this conference call related to projections or other forward-looking statements may be relied on subject to the Safe Harbor statement included in the earnings release last night and may continue to be used while this call remains in the active portion of the company’s website. In addition, we would like you to please be aware of several upcoming Yum! investor events where you will have a great opportunity to meet leadership teams from our businesses. July 29th we will host KFC investor day here in Louisville; August 11th we will host Taco Bell investor day in Irvine, California. Please notify us as soon as you can if you plan to attend those events; and then lastly, our next earnings release will be Tuesday, October 6th, which is our third quarter earnings. On our call today you will hear from David Novak, Chairman and CEO, and Rick Carucci, our CFO. Following remarks from both, we will take your questions. And now I’ll turn the call over to David Novak. David C. Novak: Okay, thanks, Tim and good morning, everyone. I am pleased to report second quarter EPS growth of 10% before special items. Our global portfolio delivered solid performance with system sales growth of 3% and operating profit growth of 11% prior to foreign currency translation. Our EPS growth was fueled by operating profit growth in each of our divisions and exceeded our expectations due to a much lower than anticipated tax rate. Our industry leading international new unit development continues to be a major driver of operating performance in China and Yum! restaurants international. This capability is unique to our industry and helps us consistently achieve our growth targets. We are especially pleased that each of our businesses delivered profit growth prior to foreign currency translation. Overall, our business continues to perform well in spite of a challenging sales environment. We delivered impressive operating profit growth of 11% due to number one, strong international development; number two, the proactive measures we took last year to reduce our U.S. G&A costs and to improve our margins with productivity majors; and three, a more favorable commodity environment. All in all, this will be a year where profits are up and sales are sluggish. Our 10% EPS growth target, which was viewed to be somewhat aggressive, is still intact. Now let me take you through our key strategies and trends for each of our divisions. First, let’s talk about China, where we continue to build leading brands in every significant restaurant category. New unit development continues to be the leading contributor to our growth and we remain the largest U.S. retail developer in this dynamic growth market. In fact, we have opened 216 units year-to-date and remain on track to deliver at least 475 new units in mainland China. Importantly, our returns continue to be outstanding and these new units will drive profit growth in the coming years. In the second quarter, our system sales in China grew by 8% and our same-store sales were down 4%. As you know, we anticipated this softness because we were lapping 14% same-store sales growth last year. Importantly, our operating profit was up 14%. I also want to emphasize that we are confident as ever in our strategy to continue to expand development across mainland China given the high returns we generate across all tiers of cities and regions. As a reminder, KFC is now in more than 550 cities. Importantly, we are well-staffed with talented and trained restaurant general managers ready to go into new stores as they open. KFC is a major brand with rapid growth that enables recruitment of talented people. There’s no question in our minds that the foundation of our China growth model remains rock solid. Now let me share with you a few highlights from each of our leading brands in China. KFC continues to lead the western QSR category, approaching 2,700 units today with average unit volumes of $1.4 million. We continue to execute our incremental sales layer strategy, giving consumers more reasons and ways to access our brand. Most significantly, we are targeting major new day parts via expansion of our breakfast menu and home delivery of KFC. Breakfast continues to steadily grow. The team is focused on growing the breakfast menu from currently less than 5% of sales to ultimately owning the breakfast day part in China. KFC delivery business continues to grow and is now offered in 70 cities and over 500 units. KFC in China also stands for much more than chicken by offering beef and fish. This summer we will be introducing new snackable items that are value-priced. The KFC brand continues to build its leading image across key brand measures versus its major competitor. Moving on to Pizza Hut casual dining, it continues to lead the western casual dining category with 435 units in over 100 cities. We are seeing strong consumer response and results from our new menu, which includes new entrees with beef, chicken, and shrimp, along with a wide variety of beverages and desserts. There’s no question Pizza Hut casual dining has made major progress in transforming its menu and service to become a true casual dining concept. We also continue to invest behind the development of our emerging brands. Pizza Hut home service, a new category we are building, now has 81 units and has expanded beyond top tier cities with presence in 11 cities now. This brand is driving growth with its focus on value, online ordering and by offering home meal replacement solutions that include pizza, pasta, and rice dishes. East Dawning, our Chinese fast food brand, continues to evolve as we drive for scaleable economics. We are making improvements to service and innovating our menu. Importantly, this quarter we opened our first central kitchen to increase the efficiency of this concept by bringing a portion of the more complex food preparation up-stream to a central facility. We believe this will be a major advance towards improving our unit level economics. In summary, we believe our China business continues to be the largest restaurant opportunity of the 21st century. Next, Yum! Restaurants International, which is the division accountable for the balance of our significant international operations, our strategy for Yum! Restaurants International is to drive aggressive expansion and build strong brands everywhere. I recently attended our franchise convention in Prague. It was great to see our franchisees’ enthusiasm and passion for our brands. They are excited about new unit development and particularly love our ideas for building major sales layers. For the second quarter, system sales grew 6% prior to foreign currency translation, including development of 193 new units in more than 50 countries. Operating profit growth was 6% excluding foreign currency translation. I’d like to commend the teams in KFC U.K., Australia, and Japan for driving stellar sales growth in mature economies that are clearly going through a tough patch. Yum! Restaurants International’s new growth markets delivered 16% system sales growth this quarter with the benefit from new unit development in high growth markets like France and India. Our KFC France business generates the highest KFC average unit volumes in the world of roughly $4 million per year. With this kind of sales, we believe we have the unit economics to drive scale and can expand KFC rapidly from 79 units and modest profits today to over 300 units and at least $100 million in profits in France. Likewise, India continues to drive impressive growth. We now have nearly 50 KFCs. Same-store sales are up around 25% and we now have double-digit store level margins. We are more confident than ever that we will be able to build significant KFC scale. Pizza Hut with 157 units is also driving strong growth and this year was highlighted as the most trusted food service brand by the economics times of India for the fifth consecutive year. Later this year, I will be visiting India to see first-hand the progress we are making at KFC and Pizza Hut and also to witness the opening of the first Taco Bell. There’s no doubt India is a huge opportunity for Yum! Brands with its over 1 billion people and 60% of its people being under 30 years old. I am pleased to say we are also making progress on the foundation for making Taco Bell a global brand. We now have 202 traditional units in over 15 countries outside the U.S. In the next 12 months, we will be opening Taco Bell in new markets like Panama, Peru, Cypress, and Korea. Taco Bell represents a great way for franchisees to leverage their infrastructure and enthusiasm is growing as we get more and more markets up and running. For KFC and Pizza Hut, we continue to be focused on building our incremental sales layers. KFC's crushers line of beverages continues its rapid expansion and is showing up in places like India, Brazil, the Philippines, and the Middle East. We are now in over 450 units in 19 countries, nearly double where we were in the first quarter. We are aggressively expanding this layer and expect to have crushers in over 2,000 KFCs by the end of the year, up from just over 100 as we entered 2009. This is just the beginning of a new base of products that will allow us to begin building a full line of contemporary beverages that can be enjoyed as either a snack or dessert. Our KFC breakfast initiative we call KFC A.M. continues to grow as well with nearly 400 units, primarily in Asia. It’s also being tested in the U.K., South Africa, and soon in the Middle East and the Caribbean. We believe breakfast is a great opportunity outside the U.S. where there is much less competition. Pizza Hut's big move is to expand its menu to include more pastas, more appetizers, more desserts, and more beverages. We are definitely elevating our game to become a true casual dining brand around the globe and know that offering more than just pizza is a must for long-term success. Just like China, the foundation for Yum! Restaurants International growth is on track and rock solid. Next on to our U.S. business, where our focus is to improve our brand positions, consistency, and returns. For the second quarter, U.S. same-store sales declined 1%. Both Taco Bell and KFC had positive same-store sales growth which was offset by the weakness at Pizza Hut. As a matter of fact, KFC turned around its sales from a 7% decline in the first quarter with the successful launch of Kentucky Grilled Chicken. Consumers absolutely love this product and the best advertising you can have is word of mouth. And if you haven’t tried it, you should. It is definitely a five-start product. Kentucky Grilled Chicken clearly addressed an unmet consumer need and the biggest barrier for this brand -- people cutting back on fried foods. We had a powerful marketing campaign and as a result, we had an unprecedented 30 point swing in our same-store sales growth versus pre-launch. Kentucky Grilled Chicken is already a significant product for the brand and is sustaining at over 40% of our chicken-on-the-bone sales. This has to be the best product launch in our history and I don’t know of any other product in our industry that has changed a brand so much for the good. Having said that, after the introductory launch, sales flattened during the $9.99 grilled bucket value promotion, showing just how difficult it is to drive dinner price points. Going forward, our goal is to get all fast food users to try Kentucky Grilled Chicken, focusing on individual meals. We only have 20% trial and most of America goes to KFC once a year. So we have major upside to keep growing the business. Now here’s why we are very confident that Kentucky Grilled Chicken is here to stay. First, the product is loved, with 85% of consumers finding it appealing and importantly, over 85% expressing repurchase intent. Second, the operating platform works and third, we have major product innovation that we will build off this platform with other grilled type products. Kentucky Grilled Chicken was a must-have for the brand to turn this business and there’s no question that it gives us a great platform going forward for growth. Taco Bell continues to do relatively well, given we have the number one value image in the category, which is perfect for these times. We will continue to reinforce our why pay more menu and continue to introduce great-tasting products like our Volcano Tacos, Burritos, and nachos. At Pizza Hut, however, we are really struggling [by growth] in this more discretionary, higher ticket dinner occasion. This challenge is magnified as we lap strong results from the launch of pasta last year. Balance of year, Pizza Hut will be launching new pizzas and nationally advertised Wing Street. Our food has never been better and we are making the necessary investments to end this year with the variety we need to grow. We remain condiment in our strategy of transforming Pizza Hut to include pasta and wings, along with our world famous pizzas. 2009 is a year where we are especially appreciative of our global portfolio. Our international new unit development combined with our tight cost management should allow us to deliver 10% EPS growth for the full year. This will allow us to build on our seven-year track record of double-digit EPS growth. At the same time, our company’s position is as strong as ever and our efforts in 2009 will pay dividends in 2010 and beyond. Now let me hand it over to Rick to give you more details. Rick. Richard T. Carucci: Thank you, David and good morning. During our call today, I am going to comment on three areas -- our second quarter results, our outlook for the second half of 2009, and our approach for managing our business during the balance of this year. Yum! delivered second quarter EPS of $0.50 per share for growth of 10% excluding special items. Before we review our results by business segment, it may be useful to highlight some of the key themes that categorize our Q2 performance. Theme number one -- sales in the U.S. and China, our two biggest businesses, were below our expectations. Theme number two -- despite these sales results, margins in the U.S. and China were significantly better than expectations. Theme number three -- we were delivering U.S. business G&A spending reductions and will at least meet our full-year G&A commitment. Theme number four -- Yum! is continuing to benefit from its status of being the largest international developer. We remain on track toward achieving our new unit growth targets and this is leading our profit growth in China and YRI. Now let’s look at our second quarter results by business segment, beginning with China. China division system sales grew 7% and operating profit grew 11% excluding foreign currency translation. Please note that this is on top of operating profit growth in 2008 of 26% excluding for-ex. This profit growth was fueled by new restaurant development and continued margin improvement versus last year, which more than offset the same-store sales decline of 4%. In the second quarter, we saw some sales weakness in big export driven markets, especially versus Central and West regions. However, to keep the same-store sales results in perspective, please note that our two-year growth numbers are still quite positive in an environment where we are adding new units at an 18% annual rate. During the quarter, we opened 118 new restaurants in Mainland China. Our returns continue to be exceptional for new KFCs in Mainland China. As I explained on our last call, new units continue to meet our high expectations with projected returns on investment of nearly 30%. This is an all-in return taking into consideration estimated sales transfer from nearby stores and an allocation of corporate G&A. As long as we continue to expect this type of return, we will continue to rapidly expand in China. Restaurant margin was nearly 18% in the second quarter or 0.8 points above last year. The increase in margin was primarily driven by some remaining pricing benefit from 2008 actions and modest commodity deflation. Now on to YRI -- system sales and operating profit growth were both 6% prior to foreign currency translation, driven by same-store sales growth of 1% and net unit development of plus 4%. YRI added 193 units in the second quarter and is still on track to add about 900 units for the full year. Both restaurant and operating margins improved for the second quarter, reflecting the benefit of solid growth, combined with a franchise nominated business. While there was solid growth for both sales and operating profit in local currency terms, foreign currency translation continues to have a major impact on this business. Foreign translation dampened second quarter profits by $24 million, resulting in lower YRI profits in dollar terms for 2009 versus 2008. In the U.S., same-store sales declined by 1%, driven by a decline of 8% at Pizza Hut, nearly offset by 3% growth for KFC and 1% growth at Taco Bell. Consumer spending is obviously restrained and we don’t see that changing. Despite a slight sales decline in U.S. sales, we saw second quarter restaurant margin increase by over two full points. We are seeing dramatically improved commodity cost environment in the U.S. For the first time in quite a while, we saw commodity cost deflation of $4 million in the quarter. As previously communicated, U.S. profitability in 2009 will also benefit from the restructuring which was completed in late 2008 and early 2009. There was $18 million in G&A savings for the second quarter which is on top of $20 million of savings in the first quarter. We are quite proud of the efforts of our U.S. teams to achieve these productivity improvements. The good news is this is at the same time -- at the same time our productivity improved, our customer measures are equal to or better than last year. The combination of restaurant margin improvement and G&A reductions led to operating profit growth of 8% in the U.S. Prior to closing the books on the U.S., I would like to mention that our refranchising program has continued to move forward. Although tight credit markets continue to slow transactions, we refranchised nearly 200 restaurants year-to-date and we remain on pace to achieve our full-year target of 500 units. For Yum! overall, there are two other factors that I would like to highlight in the second quarter -- our tax rate and the impact of the Shanghai business entity ownership change. The quarter two tax rate of 16% excluding special items was well below our previous expectation and was a key driver to why overall second quarter EPS results were also ahead of expectation. While this helped drive higher than expected Q2 earnings per share growth, it did not drive year-over-year results because we were lapping a record low tax rate of 15% in the second quarter of 2008. While it’s very hard to accurately forecast our tax rates, we now expect the full-year tax rate of around 25%, or two points lower than the estimate starting the year. This reflects the better-than-expected year-to-date tax rate prior to special items. Please note that while EPS excluding special items increased by 10% in the second quarter, reported EPS increased by 40% to $0.63 per share. While we believe that EPS excluding special items is a better indicator of our underlying business performance, I do want to briefly explain these reported results. In the second quarter, we increased our ownership in the KFC Shanghai business entity from 51% to 58%. This resulted in a required write-up in asset carry value to market and a gain of $68 million. The acquisition of this additional ownership led us to an accounting position where we now consolidate the KFC Shanghai business in our financial reporting. To summarize the second quarter for Yum!, it was great to see each of our divisions achieve solid profit growth prior to foreign currency translation. The EPS growth of 10% before special items also benefited from lower interest expense versus last year and fewer average diluted shares outstanding. These benefits helped to offset approximately $0.03 per share of negative foreign currency translation impact for the quarter. All things considered, we were quite satisfied with our second quarter results. Now let’s look forward to the second half of the year -- overall we expect the trends previously discussed in the second quarter to continue into the third quarter and possibly for the balance of the year. We expect the challenging consumer environment to continue. This will translate into softer than usual sales growth in the U.S. and China, offset by reduced costs in both of these businesses. In fact, we expect to see significant improvement in year-over-year commodity costs in both the U.S. and China. For the balance of this year, we anticipate commodity deflation of about $10 million in the U.S. and commodity deflation of nearly $50 million in China. We expect to continue to deliver G&A cost reductions in the U.S. as a way to help deliver our bottom line. We anticipate that we will achieve at least the $60 million reduction in G&A costs we’ve discussed previously. Finally, our international development will continue during the second half of the year. We are on track to open 1,400 new units in China and YRI combined for 2009. This will help deliver profit growth in 2009 and into 2010 as well. At YRI, with the first half pace of over 3% same-store sales growth, we expect little change for the balance of the year. With its diversity of markets as a core strength, we expect YRI to generate about 3% same-store sales growth for 2009. We are expecting a slight moderation in the negative impact from foreign currency translation when comparing the second half of the first half. That’s based on exchange rates today and is obviously subject to change. When we look at Yum!'s overall balance of year expectations, we expect a higher rate of worldwide operating profit in the second half versus the first half. This will be offset somewhat by unfavorable impacts from non-operating factors like our tax rate and shares outstanding. We completed last year’s large share repurchases in the third quarter. As a result, the average diluted share count will shift from year-over-year declines in both Q1 and Q2 of this year to a slight increase by the fourth quarter. In addition, while our full year tax estimate is lower, we currently anticipate a slight EPS headwind due to tax in the second half of the year. Please note in our release last night, we provided a link to our website that provides a more detailed update of significant changes in our guidance. As we have the first half of 2009 behind us, let’s look at how we are approaching the balance of this year. As I said on our last call, we are living in a difficult environment for making forecasts. This picture really hasn’t changed. It clearly is harder than normal to predict how sales and costs will play out the remaining half of this year. We are focused on continuing our track record of seven consecutive years of double-digit EPS growth. The good news is that we have 12% EPS growth for the first half already in the bank. I am very proud of how Yum! has managed its costs in the first half. We plan to continue this focus for the balance of the year. We’ll also continue to strengthen already strong balance sheet. At the same time, we will keep working to ensure we end up with an even better long-term debt structure. As David discussed, we will be very focused on continuing to build our new incremental sales layers. While this often involves some capital investment for new equipment, we remain confident that these are the right strategies to strengthen our brand positions for the long-term. We are not sacrificing other investments in our long-term growth. We recognize that one of the things that makes Yum! special is a very long runway for our global growth. We are continuing to make investments to capture this growth opportunity. For example, we continue to open new Taco Bell units in YRI and build scale in a key growth market like India, even though major profit contributions from these investments are well into the future. 2009 would mark our eighth straight year of double-digit EPS growth. When we look back upon our track record, each year has been unique. [In any one year, we meet] or exceed expectations in many areas of our business and we usually face opportunities and challenges that we did not expect. However, I believe it is very fair to say that we consistently benefit from a resilient global business model led by strong management teams throughout the world. Our leaders feel a very high degree of accountability to deliver both annual financial performance and the long-term business values. I remain confident that we will end 2009 and enter 2010 with an even stronger and better-positioned company. Back to you, David. David C. Novak: Okay, great. Well, let’s just move right into Q&A and answer the questions.

Okay, let’s open up for questions, Rachel.

(Operator Instructions) Your first question comes from the line of David Palmer with UBS. Analyst for David Palmer - UBS: This is Stefan on for David. Are there any particular data points that you can offer us with regard to the buying patterns of the Chinese consumer? So for instance, are they trading down within the menu? Are families going less often? Or are consumers in the big city behaving differently than they are maybe in the smaller cities? So any color on the Chinese consumer would be helpful. Thank you. Richard T. Carucci: A macro level and then we’ll bring it down to our business there -- at the macro level, as we sort of said before, we saw the big bump in China sales, the bloom came off the roses after the earthquake last year. And then business was pretty steady after that, and then we saw another decline in sentiment when the worldwide issues started with the financial crisis in the U.S. So those are really the two data points that we thought were the two major ones from the consumer standpoint. With the November change, the one thing that we felt in our business is that there’s been a little less soft drink incidents, so some people may be trading out of soft drinks. That really started in November, it really hasn’t changed materially between then and now. The Chinese consumer, you know, again, I sort of look at it this way -- overall China economy is a better economy, in better shape than most economies around the world. We still feel very bullish about the long-term trends in China. Right now, the consumer is cautious. Their saving rates are still -- continue to rise, so they are being conservative with their spending right now. Analyst for David Palmer - UBS: Thank you.

Your next question comes from the line of Joe Buckley with Banc of America Merrill Lynch. Joe Buckley - Banc of America Merrill Lynch: Two questions -- first, a non-operating factor, interest expense number was considerably lower than what we were thinking, lower than the first quarter. It didn’t look like your debt total changed very much. I know you did some debt reshuffling, I guess I’d say, probably not the best term, during the quarter but what should we expect going forward on that interest expense line?

On that, basically for the second quarter it’s a reflection of the really lower rates, lower LIBOR rates which drives our variable interest expense and those are really low. So that’s a big benefit. And then also for the quarter, our average debt balance was quite a bit lower than last year, so even though the quarter end debt was about the same or actually a little higher, the average for the quarter was quite a bit below. And then also we did take out some of our long-term debt. You saw with the debt tender, the bond tender offer. So this should be, you know, depending on what your forecast is for short-term rates is going forward, this should be a pretty good basis going forward for interest expense. Joe Buckley - Banc of America Merrill Lynch: Okay. And then a question also on China -- so the two-year run-rate you are implying for the back half of the year decelerates pretty substantially. This quarter you were plus 10 on a two-year basis and if my math is right, your guidance for the second half implies kind of five, plus six maybe third quarter, plus two in the fourth. The macro news coming out of China seems to be getting better, not worse, so could you address why you think it’s falling off so dramatically? Richard T. Carucci: I’ll take a little bit of a shot at that. The economy in China, you know, we think has been steady. I think what happened a little bit, Joe, is the forecast went down a lot in the first quarter and it seems to have gone up a lot in the second quarter, so I think it’s more the forecasts that have changed in the quarters than the real economy. The stuff that’s improving in China tends to be some of the large durable goods, of which there’s heavy government subsidies right now towards incenting that, so I’m not sure that the consumer sentiment has changed that much since November of last year. In terms of our business, you know, we gave in our link what we think our full-year numbers will be in China, which is about flat same-store sales for the full year and that’s based on what’s occurred year-to-date as well as the current business. One thing to keep in mind, you are right in terms of we have easier overlaps in Q3 and Q4 this year than we had in the first half but also those Q3 and Q4 were overlapping double-digit same-store sales from the year before that. For example, in Q4 2007 we were up 16% same-store sales. It was one of the periods when we were really -- the economy was really flying there.

We had, you know, in terms of the macros and trying to get at what you are getting at I think, Joe, is the only thing that we can find, because certainly the macros in China look really good on some of the more industrial kind of side of the economy, but when you look at consumer confidence actually it’s kind of bumping along the bottom, so that might be a reasonably good indicator of the consumer side of the equation. And then also consumer savings deposits are actually increasing at a pretty rapid rate, so there’s -- at least there’s no -- if that one particular indicator is no sign of the consumers opening up their pocketbooks on a fairly decent pace. Joe Buckley - Banc of America Merrill Lynch: Okay, and last question -- could you talk about check versus traffic, what you saw in this quarter and what kind of pricing or price laps you have coming up in the second half?

We did lose two to three points of pricing in March, so at the beginning of the second quarter in China. And then we’ll lose -- right now all we are carrying is about 2.5, 3, and that will roll off in a month and we don’t plan any new pricing. Check is actually about flat in China. U.S., $4. Joe Buckley - Banc of America Merrill Lynch: Okay, so the down 4 is really all traffic in the second quarter?

Correct. Joe Buckley - Banc of America Merrill Lynch: Okay. All right, thank you.

Thanks, Joe. Next question please, Rachel.

Your next question comes from the line of John Glass with Morgan Stanley. John Glass - Morgan Stanley: Thanks. I’ll throw one more on China, then a follow-up on commodities -- you’ve been reticent in China to discount, or more reticent maybe than McDonald’s has. Does a protracted downturn there in the consumer change your view on how you want to drive traffic in that business going forward? Or maybe you could just review where you stand in kind of a promotional strategy in China? David C. Novak: Well first of all, I think we have very strong everyday value going in, so we think our value equation is good. We are doing some snackable type products at the low-end to provide even more value for the second half of the year but we feel good about our overall proposition. The thing about China which is so powerful is our unit economics are fantastic. We continue to have great unit economics at the sales levels that we’re at and we are obviously going to do whatever we can to get the same-store sales up. But the big driver for China over the long-term is going to be the opening of the new units, which we think we are in the very early innings on with returns that I don’t think anybody else in the industry has anywhere. So we are very bullish on China over the long-term and we’ll continue to push for both same-store sales and system sales growth through the new units. And the other thing that I think is very powerful for us is that when we look at our brand measures, you know, the regard for the brand across all the key measures, we are as strong if not stronger than ever. So as we go forward, the China equation is very, very strong. John Glass - Morgan Stanley: Great, and then Rick, can you just go through the commodity outlook for the back half of the year by region? What are you expecting in terms of inflation or deflation in each of the three major regions in the back half? And maybe if you could compare that to what you thought at the beginning of the year? Richard T. Carucci: Well, clearly as I said, commodities have been much more favorable than what we thought would happen at the beginning of the year. China in the back half of the year, we could expect $50 million of deflation, primarily led by chicken and oil would be the second biggest item to that. In the U.S., we expect deflation of about $10 million and that’s pretty much across the board benefit, except chicken -- chicken we actually have a slight inflation in the back half of the year. And then, if you look at YRI, they have not benefited from the same type of commodity deflation. We’ve had about 5% increases year-to-date. We expect probably something similar in the balance of the year, as we have a lot of long-term contracts there. Hopefully we’ll see some benefit in that business at the very end of this year and going into next year. We have some other information --

There is some information in the release as well, John, so if you are looking for anything specific, that pretty well covers it. John Glass - Morgan Stanley: Great. Thank you.

Your next question comes from the line of Keith Seigner with Credit Suisse. Keith Seigner - Credit Suisse: Thanks. A quick question on the change in guidance for the proceeds from the refranchising program -- I mean, it looks like the number of units estimated to be refranchised is the same but the proceeds are coming down. Can you talk about -- is this related to maybe changing market conditions, is it changing mix of units to be sold? Any color behind that would be helpful. Richard T. Carucci: It’s a little bit of mix but some of it is just as credit has tightened, that’s had some impact on pricing, so it is probably driven more by market forces than mix. There is some impact of mix. Keith Seigner - Credit Suisse: Okay, and then just a quick question on the uses of your free cash -- you continue to build cash balances, you know, it looks like during the quarter really the only major outlay was an $86 million contribution to the pension plan. You know, you’ve got low interest rates on most of your debt. The bond holders don’t really want to seem to sell. What’s your prioritization for the free cash as you go into the second half in terms of more pension plan contributions, maybe debt reduction, repurchases? Prioritization on that would help.

We actually did pretty well with the -- it was a tale of -- there were two sides to it. The bond tender we actually did pretty well. We wanted to -- we made an offer for $150 million. We got $137 million, so that was good but we did find there was a pretty good contingent of folks out there that like to hold their bonds. But we have a number of ways that we can continue to reduce our debt. That’s going to be our focus. We want to add a degree of even more strengthening to our balance sheet than where we feel we are today. We want to make sure we are in great shape. We don’t have any nearer maturities. We don’t have anything until 2011 but we were planning to win, when we get into that time frame and you know, it’s really difficult to try to predict what that conditions of the credit markets are going to be, so we want to be in really good shape at that point. We are always going to look at share buy-back but at this time, we don’t anticipate any. You are seeing the other side of it, reducing our debt and our interest expense is coming down. Keith Seigner - Credit Suisse: Okay, thanks.

Your next question comes from the line of Steven Kron with Goldman Sachs. Steven Kron - Goldman Sachs: Thanks. A couple of follow-ups on China and then another question -- I guess, Rick, just going back to the guidance for a second, can you maybe just drill down a little bit for us how May and I know June falls into the third quarter, how that has been trending? In your prepared remarks, you talked about a two-year trend still holding up very much positive. Is your guidance in the back half reflective of what you are seeing in the business today such that your June comp is back to on that flattish range? Can you maybe drill down for us on that? Richard T. Carucci: Regarding May, May was positive but not as positive as we hoped it would be. The full-year guidance really reflects several factors -- one, it reflects what’s happened year-to-date. Secondly, it does reflect trends and what we’ve seen so far. And third obviously reflects our best judgment of what’s going to happen from an economic standpoint -- very hard to forecast, as we’ve said. We’re not going to share what the trends are within this current quarter. Steven Kron - Goldman Sachs: Okay, what about trends, the disparity of same-store sales between the different tiers of cities -- tier one, tier two, tier three? Was there a big notable difference? Richard T. Carucci: Not so much in tiered cities as much between the export markets and the non-export markets. The export markets are probably running several [inaudible] below the non-export markets, with certain cities being impacted more than that. You know, one of the interesting trends in China has been where the economic growth has been and where it’s going to be and there’s sort of three broad geographies in China that sometimes people use -- the coastal, central, and west. And right now, 75%, roughly 75% of our units are in the coastal area and 25% are in the central and west. The population has 50% coastal area and 50% in the central and west combined. And what we expect to do is to continue to have more development in the central and west parts of the business, both new unit development and my guess is same-store sales may trend that way too. Obviously it depends on our development pace. As an example though, while central and west are only 25% of our existing units and 50% of the population, in 2009 we’ve shifted so that now they are almost 40% of our new unit development. So what we are able to do because we are in 550 cities is we are able to take advantage of the higher growth in the west and central, so I think that is sort of probably the trend that we are going to be pushing in China over the next several years, taking advantage of what we think is going to happen to their economy. Steven Kron - Goldman Sachs: Okay, that’s helpful. And then one question on the U.S. on Pizza Hut -- clearly a challenging quarter. I know you guys are very much looking forward to going national with the Wing Street launch later in the second half. You do have Wing Street I think in nearly 2,000 stores at this point. Is there any notable difference between the comp trends in those stores that have the Wing Streets versus those that do not? David C. Novak: Well, I think that -- I don’t think we have a significant difference in the comps on an ongoing basis but the mix continues to be solid on the Wing Street stores. What we do see is we do obviously when we introduce Wing Street, it does provide a lift. We are very bullish about the strategy that we have at Pizza Hut to move beyond pizza to include both pasta and Wing Street. You know, we really believe that that extra variety is going to give us an opportunity to change an overall category that’s been pretty sluggish the last 10 years. We’ve got a great asset base that is under-leveraged and we think with the combination of the pasta and the chicken to go along with our pizza, we are going to have many more weapons in our arsenal to get the sales and bring in new occasions over the long-term. The big challenge that we have is to build awareness of these new segments and to drive incremental occasions, which we are working very hard to get done. Steven Kron - Goldman Sachs: Okay, I’ll just sneak one last one in there as a follow-up to the commodity question -- Rick, what you laid out for the second half for China in the U.S., the favorability, is the third quarter or the fourth quarter going to be the quarter which sees the disproportionate benefit? Thanks. Richard T. Carucci: Right now our estimate is the third quarter will have more of the benefit. Steven Kron - Goldman Sachs: Okay. Thank you.

That’s true for the U.S. and China. Rachel, next question, please.

Your next question comes from the line of Mitch Speiser with Buckingham Research. Mitchell J. Speiser - Buckingham Research: Thanks very much. A few questions -- first in China, can you give us a sense of how the KFC business did versus the Pizza Hut business in terms of same-store sales in the quarter? Richard T. Carucci: Pizza Hut performed better than KFC did in the second quarter. Mitchell J. Speiser - Buckingham Research: Okay. And separately, I think your U.S. margin guidance, you did about 155 basis points of margin expansion I believe in the first half in the U.S. You’re saying I think at least one point in the second half. That does imply less margin expansion in the back half of ’09. I’m just wondering if you can comment maybe on some of the things that might make margin expansion less so in the second half versus the first half. Richard T. Carucci: In the fourth quarter, we’ll start to get less benefit from pricing. As a reminder, in 2008 we took pricing continually through the year and so by the fourth quarter, most of it had been taken by the fourth quarter so the rollover on pricing diminishes in the fourth quarter of this year. Mitchell J. Speiser - Buckingham Research: Okay, and if I can keep going, on Pizza Hut, just to revisit that, you do have the positives now, you do have Wing Street rolling out, so in terms of the down 8, is it the base pizza business? Can you maybe discuss the buckets or Wing Street stores on a comparable basis comping positive? Richard T. Carucci: No, as David said, the benefit we’ve gotten from Wing Street has generally been when we’ve introduced it, so we don’t see big differences in the comps. Now that could change once we have enough scale to nationally advertise the product, so we have very high intent on making this a winning sales layer for Pizza Hut long-term. But we didn’t see any huge differences in the comps between those stores and regular stores in the second quarter. Mitchell J. Speiser - Buckingham Research: Okay. Thank you.

Your next question comes from the line of John Ivankoe with J.P. Morgan. John Ivankoe - J.P. Morgan: Thank you. The question is on the U.S. G&A cuts -- you know, as we get more into 2009 and you are evidently realizing $60 million of cuts, I mean, could you I guess give a little bit more illumination in terms of how you’ve actually cut your cost structure, what you’ve actually done and what confidence that you have that you’ve done the right things from a business perspective, from a top line perspective in those cuts? And you certainly put that in the context of whether in 2010 you might need to add costs back or whether there might be even some more cost cuts to come in 2010 as the level of company ownership continues to come down. Richard T. Carucci: Yeah, again as a reminder to what we did at the back-end of 2009, the 2008 and 2009 is we were looking at our refranchising story and we were anticipating what the sizes of our businesses would be at the end of that period. And traditionally we had a lag between when we refranchise restaurants and when we reduce the G&A. And so what ended up happening is we sort of challenged ourselves and said can we reduce some of this G&A in anticipation of refranchising? And for example, the field type stuff we know has to occur with refranchising, things like area coaches, payroll, clerks, et cetera. So those position get -- directly follow refranchising. However, if you look at functions like marketing, headquarter folks, et cetera, we’re saying we probably need fewer people ultimately because it takes less to support a franchise business than a company-owned business. So that’s what we do. We basically did headcount reductions, mostly at the U.S. level and in shared services level and anticipation of that. We’re comfortable with what we did. As we go forward, we do expect to see some G&A reductions because field type positions will still get reduced when we refranchise restaurants but it won’t be nearly as dramatic as the changes that we made at the end of 2008 and 2009. In terms of planning for 2010, you know, obviously we are going to be doing that starting now, balance of year and we’ll position ourselves in the best way possible but we don’t have any concrete plans at this stage. David C. Novak: John, the only thing I would add to that would be two things -- one is we reinvested back in operations, in particularly KFC because we felt we had a real opportunity to do even better there. The other thing is that there’s no question in all of our division presidents, we now have a better, stronger organization than we had last year, more focused. We eliminate a lot of activity and we’ve been focused on action, so I think we’re very, very confident in our organizational structure to deliver results. John Ivankoe - J.P. Morgan: Okay, thank you for that. And just follow-up -- Rick, at the tail-end of your prepared remarks, you talked about equipment investment, necessary equipment investment that might be part of the future and to my memory, the ovens or the grills, whatever you want to call them at KFC, was a fairly unique phenomenon for Yum! to basically pay for the equipment of a franchisee. I mean, is that -- are you eluding that there might be similar type of programs in the future that you might be paying for for the franchisees in order to get new products into the systems? Richard T. Carucci: I guess what I was eluding to is that we are investing, both us and our franchisees are investing in these times and so in general, the difference between layers of new product developments though is often there is some piece of equipment that’s involved. So for example, beverages, you need different beverage equipment, as we do crushers in Yum! Restaurants International. Similar to when we did Fruitista products at Taco Bell, we needed those types of equipment. So when we do Wing Street, that involves new equipment and some signage as well, so we’re just saying we’re going to continue doing those types of things. We’re not insinuating that we are going towards a different model for how we fund it. John Ivankoe - J.P. Morgan: But will you be buying that equipment for the franchisees as you did with the ovens at KFC? Richard T. Carucci: Doubtful. John Ivankoe - J.P. Morgan: Okay. All right, great. David C. Novak: Very doubtful.

Thanks. Next question please, Rachel.

Your next question comes from the line of Jeffrey Bernstein with Barclays Capital. Jeffrey Bernstein - Barclays Capital: Thank you. Two questions -- one, I just wonder if you can give a little more color on Taco Bell, which I guess represents the -- well, more than 50% of the U.S. profits and the last quarter you talked about how it was slowing a little bit perhaps due to some of your closest quick service tiers kind of getting into your face in terms of more the value push and we’ve only seen that escalate since then. I’m just wondering if you could talk a little bit about the pressure you are seeing from your peers with the dollar price point, how you guys are responding to that and what you are seeing most recently in terms of those trends. David C. Novak: I think it’s pretty much a continuation of our conversation we had last quarter. I mean, the Taco Bell brand does stand for number one in value but we definitely have to weather the storm of everybody else getting into their dollar menus. And we don’t see that changing for the balance of the year and I think that makes it a lot tougher for Taco Bell than when there’s only three or four concepts that are making that their everyday message. But that is the everyday message for all the chains right now, so we definitely are under more pressure. But the brand remains strong, we have lots of ideas in terms of how we are going to keep it going, we are going to continue to focus on our why pay more menu, and bring news to that, plus we are working on some major, major sales layers over the long-term. You know, I think that there’s no question when you just look at the U.S. business, we’re in a transformative stage I think for each one of our businesses. You know, with Pizza Hut, it’s obviously to move beyond pizza to pasta and chicken, and we’re absolutely convinced that’s going to allow us to get more incremental occasions over the long-term. At KFC, we needed to address our number one issue, which is people moving away from fried foods, so we added a new oven platform. And we are very confident that we’ve made the right move with Kentucky Grilled Chicken and it’s going to sustain and we have a much bigger and more popular and more appealing product base to grow from as we go forward. With Taco Bell, we’ve got I think the most charismatic brand in the category where the heavy fast food user absolutely loves the brand. We have outstanding unit economics. You know, we can really grow this business. I think the thing that we are really focused on is adding big new sales layers that will improve our unit economics so that we can open up more units in the United States, which we think is a distinct possibility. So the things that you really can’t see in the marketplace are the things frankly that we’re most excited about over the long-term, whether it’s figuring out how to build a significant dinner business to the new approach that we have to going into breakfast, which we put into some stores that we are seeing some good initial results on. You know, these are the things that I think are truly going to change the game for a concept that’s already strong. But what we really need to do across the board is we’re looking for another $100,000, $200,000 in sales. We don’t want to keep these businesses the way they have been the last 10 years. We want to truly change the game. That’s why with pasta and chicken at Pizza Hut, we can truly change the game. That’s why having a non-fried platform at KFC, we can truly change the game. [That’s why] we’re working on these major new sales layers across the board, which are also traveling around the world. So we’re -- by getting these new sales layers in, developed, tested, we are much better positioned for the future and I think this year, there is no question this is a hunker down, you know, tough sales year. But the one thing I do know is we are delivering the bacon on the profit side and we are definitely strengthening these brands for long-term success. Jeffrey Bernstein - Barclays Capital: Actually, could I just follow-up on that -- you mentioned KFC was in there and I think it’s worth a couple of interesting statistics in your prepared remarks, just has a 30-point swing in comps versus the -- could you just give more color on the grilled chicken and what that did to the comps as it was rolled out and kind of what it’s running now? David C. Novak: Well, I think that pretty much tells you what happened. I mean, we were down close to double-digits and when we first launched the product, in the first month we had a huge turnaround in the sales. And I think that -- you know, I always say that any time you can solve the biggest of problem, the biggest problem that a brand has that occurred that’s the most important problem that the brand has, you are going to see big-time lifts in sales. Years ago we saw that with Taco Bell when we -- our biggest problem was portability, and we introduced the quesadilla as a hot new handheld and the grilled stuffed burrito as a heavy duty portable and the crunchwrap is good to go. For KFC, it’s that people are reducing their consumption of fried foods and this was the single biggest barrier that we had to keep our brand from being used more frequently and we communicated in extremely powerful fashion with great advertising, great promotion, also had the benefit of Oprah basically endorsing the product and this has been a tremendous vehicle to help us turn the business around. And the consumer responded overwhelmingly positive, and the feedback that we are getting on this product, anecdotally and quantitatively, is that we’ve got a product line that we can really build on going forward. So I couldn’t be more excited with the initial results with this launch and the fact that it’s 40% of our chicken on the bone business tells us that we definitely hit a chord with our customer, and a chord that we are going to be able to sustain and grow over time. Richard T. Carucci: And just as a reminder, in David’s comments, he said after the initial introduction that sales had flattened but again, remember we came into this off of a Q1 with minus 7% sales, and we are doing better than that now. Jeffrey Bernstein - Barclays Capital: Great. Thank you.

Rachel, next question, please.

Your next question comes from the line of Greg Badishkanian with Citi. Analyst for Greg Badishkanian - Citi: This is Jeff on for Greg. We got cut off, so I apologize if I ask a question that was already asked -- in terms of the YRI business, it looks like some of your big franchise only markets had seen a bit of a sequential slowing this quarter versus last. Could you maybe just give an update on whether the global recession is now becoming more widespread in your view, or kind of what’s going on there? Richard T. Carucci: Well you know, amazingly, the YRI business has held up and part of that could be we are a little bit more skewed towards developing economies and those businesses and economies have held up. But as David also said in his remarks, some of our mature businesses have performed very well in some difficult economies, reflecting I think the strength of the management teams there and our competitive position. So that business is roughly -- has held up well.

You have to keep in mind you did have the calendar impacts, so the Q1 numbers were a little bit -- obviously benefited from that and Q2 was hurt by that a little bit, so you almost kind of need to look at it on a year-to-date basis. Analyst for Greg Badishkanian - Citi: Okay, and then just quickly turning back to the U.S., and KFC, are most of the customers on grilled chicken, are they mostly lapsed users or have you seen quite a bit of incremental new customers coming in? David C. Novak: Well, everybody’s basically tried KFC, so -- so I think to some extent, they are either our current users or more lapsed users. So we’ve brought people back into the franchise that weren’t there but I think 25%, at least 25% of the -- excuse me, I’m sorry -- 40% of the users are lapsed. So we are getting major retrial of the brand and we are only at 20%, so we have a huge opportunity -- 20% trial, so we have a huge opportunity to continue to drive this business. Analyst for Greg Badishkanian - Citi: Would you expect future promotions on that to kind of -- David C. Novak: No, we’re -- part of our problem right now I think is to a certain extent, we had a calendar that was already set to move off of the grilled chicken focus a little bit more prematurely than I think what we should have, so we will be hammering home Kentucky Grilled Chicken for a long time to come, plus we have a significant amount of product news coming off of that base product line. So we have a lot of opportunity to generate even more news as we go forward and you’ll see us being -- featuring grilled chicken in all of our promotions, so everything now will have both a fried and a grilled twist, so you can basically get KFC any way you like it. Analyst for Greg Badishkanian - Citi: Great. Thanks so much.

Your next question comes from the line of Thomas Forte with Telsey Advisory Group. Thomas Forte - Telsey Advisory Group: Great. Thank you very much. So first off, congratulations on the successful launch of the Kentucky Grilled Chicken. And then second, it seems like there’s an emerging price point in the QSR space with $5, so you have the dollar menu items and then you have the $5 price point, kind of started by Subway and continued by others. I wanted to know if you could give us your thoughts on your ability, especially at KFC and Pizza Hut, to make money on the $5 price point, and then what impact commodities have on the ability to do so? David C. Novak: Well, we don’t think we have any issue at all with that $5 price point. In fact, we’re doing $5 box meals right now at KFC. We’ve got the Big Eats, Tiny Price menu at Pizza Hut at $5. And you know, we are very confident that we can be competitive on the value front going forward. Thomas Forte - Telsey Advisory Group: Thank you.

Your next question comes from the line of Jason West with Deutsche Bank. Jason West - Deutsche Bank: Thanks. Just a couple quick ones -- one, was there any impact on the U.S. margins from the grilled chicken rollout? Was it a heavy quarter from a marketing standpoint that would affect timing and margins in the quarter? David C. Novak: Most of our advertising, almost all of our advertising, is formulaic in the sense that it’s contracted -- contractual driven, and so we just -- you know, that would not have affected our margins and remember with Kentucky Grilled Chicken, another reason why it’s very popular, not only with our customers but with our franchisees is the margins are actually better on a grilled piece of chicken versus a fried piece of chicken. Jason West - Deutsche Bank: And there was no impact from the giveaways around Oprah and things like that? Richard T. Carucci: We had some impact on that on the franchise expense. Some of the extra mailing costs of handling the rebate, so we picked up for the system but it didn’t impact margins, as David talked about. Jason West - Deutsche Bank: Okay, and then just on China, just so I’m clear, you said the pricing was plus 2.5 in the second quarter and the check was flattish?

Correct. Jason West - Deutsche Bank: Okay, and so then that implies the traffic was down 6%, 7% in the back half. You guys are assuming that kind of returns to flattish kind of numbers?

Well, you lose pricing -- what pricing we have remaining, which is 2.5 to 3 points, drops off in a month. So after that, what you see in same-store sales or not is transactions. And right now, average check is flat and in U.S. dollar terms is at $4. Jason West - Deutsche Bank: Okay. Got it, thanks, guys.

Your next question comes from the line of Rob Wilson with Tiburon Research. Rob Wilson - Tiburon Research: Yes, thank you. Last quarter you provided the monthly comp store sales in Mainland China. I was wondering if you could provide those again this quarter. Richard T. Carucci: No, we’re not going to do that. Rob Wilson - Tiburon Research: Why not? Richard T. Carucci: Because our policy is not to provide monthly numbers and the reason we did it last time is we thought there was a very unusual trend going on that we thought was correct this year. Rob Wilson - Tiburon Research: Okay. Could you provide us some directional information on trend -- I guess ticket and transaction counts in the U.S. for the three brands in the quarter?

Basically what we can tell you is that guest check for all three brands was roughly flat. So then you can go back to the comps that Rick -- we had negative 8 at Pizza Hut, plus 3 at KFC, and plus 1 at Taco Bell, and guest check was flat. Rob Wilson - Tiburon Research: Okay. And then finally, last quarter, Rick, you talked about a two-year trend or a run-rate in China. You seemed confident in planning comps going forward using that two-year trend. Today you are talking about a three-year trend. I guess how much confidence should we have that you are going achieve your sales plan in China? Richard T. Carucci: Well, if we were to look at basically flat sales for Mainland China, we’re lapping over positive same-store sales in both the third and fourth quarter, so you’d still be two-year positive. Rob Wilson - Tiburon Research: Okay, but last quarter you were confident about a two-year trend being around 14%. Today you are talking about a three-year trend. You are going back a couple of years, so I’m just wondering how much confidence you have in your forecast. Richard T. Carucci: Well, as we said, it’s a very difficult environment for forecasting right now, so especially when you get towards to the back-end of the -- the very back-end of the year, so I think anybody in this environment who is confident about forecasting, I’d be surprised at. Rob Wilson - Tiburon Research: Fair enough. Thanks for taking my call.

Your next question comes from the line of David Liebowitz with Horizon Capital Management. David Liebowitz - Horizon Capital Management: Good morning. You made reference early on about obtaining the number one position in the Chinese breakfast market. A, how large would that figure be? And B, to accomplish it, how many units do you have to open incremental to what is already there? Richard T. Carucci: Well again, keep in mind now most of our units, and this didn’t -- this wasn’t the case before the last 12 months but most of our units now serve breakfast, so about 90% of them. So we’ve now -- and that number was only 50% a couple of years ago, so we’ve already expanded it to most of the units. So what it really needs to do is to build up the habit of eating breakfast at a place like KFC, and we’re making progress, steady progress on that as we’ve had I think some good new product introductions. So just keep working on what we are doing now. David C. Novak: I think the big thing is that we only have like 5% mix right now and we are really creating a category, you know, and what we haven’t done is we haven’t spent as much effort up against expanding the menu and advertising on television, and those are opportunities as we go forward. But we think preemptively, we can be the absolute leader in QSR in breakfast in China and there’s no reason in the world that longer term, we can’t have 20% to 25% to 30% mix of breakfast and have a very profitable day part. Already in Hong Kong, for example, we have 15% mix. So we have a real opportunity to build a big business in that arena and nobody is going to beat us to it. David Liebowitz - Horizon Capital Management: And how large is that? In other words, to be number one, what are the dollar revenues you need? David C. Novak: Well, I don’t even know what the --

It’s an emerging category. David C. Novak: It’s an emerging category. It’s more of an up-side for us as we go forward. David Liebowitz - Horizon Capital Management: Well that said, how do you know when you will be number one? How do we make this determination if we don’t have any idea of the size of the breakfast market in China? David C. Novak: Okay, well, maybe we can always go back and try to give you a better handle on that but I’ll be sure to tell you when we’re number one. David Liebowitz - Horizon Capital Management: Do we have a timeframe, a time horizon on that -- three years, five-year, whatever? David C. Novak: No, what we do is we set a target out there and we -- what we want to do is get there the right way. See, the big thing we’re trying to do in China is keep building the premiere brand in China and keep polishing the apple, okay? And that’s why we’ll never move too fast in China but we’ll move with our people capability, you know, that’s why we will make sure that we build a day part the right way and make sure we have the right balance between the different day parts. We’ve just got a cherry business there, okay, with unit economics in China that are very similar to the kind of unit economics that McDonald’s has here in the U.S. -- where McDonald’s has 12,000 traditional units and we only have 3,000 KFCs. So we’re just -- you know, we know in a country where you already have 300 million people in the middle class that we are going to have at least that many KFCs some day and we are on a march to get there the right way, and that’s -- and getting there the right way seems to us like we ought to have a hell of a breakfast business. You know, nobody else has one and why don’t we lead there like we’ve led in every other day part in China? And so we are going to get there the right way and stay after it. So we are very confident in what we are doing in China, not only with KFC but with Pizza Hut and the big thing we want to do in China is just keep improving on the already great unit economics that we have. And so you build a home delivery business with KFC, you build a breakfast business with KFC, you’re going to be adding significant dollars to your already high average unit volumes and the unit economics usually go up when that happens. So that will allow us to continue to open up more and more restaurants, but even off the current population base in China, you know, we think we can get well over 12,000 restaurants in China. David Liebowitz - Horizon Capital Management: And one other unrelated item -- turning to Pizza Hut, what percentage of your revenue would you like to obtain from pasta and chicken over the next three years? David C. Novak: I would say that a good mix on that over time would be at least 30%. David Liebowitz - Horizon Capital Management: And will this be as profitable on your pretax line as pizza is right now at that point, three years out? David C. Novak: It would be similar. It would be similar. David Liebowitz - Horizon Capital Management: And would it also have the similar demographic of eat-in versus take-out? David C. Novak: Most of our business is take-out and delivery. David Liebowitz - Horizon Capital Management: So you would expect the same ratio though for these items? David C. Novak: Yes. David Liebowitz - Horizon Capital Management: Thank you very much.

Your next question comes from the line of Jeff Omohundro with Wells Fargo Securities. Jeff Omohundro - Wells Fargo Securities: Thanks. I just had one more question on China -- I was wondering if you could talk to the pace of unit development, opportunities and constraints around that pace of unit development in terms of people and real estate, and perhaps maybe an update on recent new unit performance in China. Thanks. David C. Novak: Well, I think first of all, I would say that we’ve got tremendous process and discipline around the growth and returns of our new units. We monitor our returns very closely each quarter. Our new unit cash-on-cash pay-back for KFCs in China is, as we’ve said before, is in the two- to three-year range. Our average new unit volumes are about $1 million a year. We get cash margins of 25% and it only cost us $500,000 to $600,000 to basically put the -- get the unit up and running. You know, we really believe very much that you’ve got to have strong operating capability to really get returns in this business. The good news for us in China is we have restaurant general managers ready to go in many of our existing restaurants today. So we’re not, as I mentioned before, we’re not in any race in China. We don’t want to get ahead of any of our capabilities and we do have great people capability there to put up some big numbers and we are -- we continue to do that. I think the other thing is that we are continuing to expand and building our competitive advantage and the breadth of our geography where we are in 550 cities, and we are going to continue to our pace of development as long as we generate high returns. You know, where we see weaker returns, we will like we have in Shanghai, okay, we’ve cut back a little bit in Shanghai and shifted some of our focus. At KFC, we’ve seen more of a modest shift to more of the central and the west region of China versus the more economically constrained markets, the export areas. And I think we’ve got great discipline on this and we are in the early, early innings. Jeff Omohundro - Wells Fargo Securities: Thanks.

I would now like to turn the call back over to management for closing remarks. David C. Novak: Okay. Well, thank you very much. You know, I think that anybody that’s followed us would know that there’s probably nobody any harder on ourselves than ourselves. You know, we’d obviously like to have better sales today but I have to tell you, when I look at the situation, I look at our company, the kind of profits that we will be generating this year versus a lot of other companies, not only in our industry but in other industries. I’m very proud of the team and the results that we are generating around the world. In total, we expect to hit our 10% earnings per share growth this year with solid operating profit growth and just as importantly, and I want to emphasize that we intend on keeping this going in 2010. You know, our global brands and our global development machine, the fact that we do have -- we are global, the fact that we do have this global development machine continues to make us not your ordinary restaurant company. You know, we are fixated. I mean, fixated on the three drivers that we know that drive shareholder value in any retail company. You know, new units -- we’re the number one international unit developer in the world today. Nobody in retail tops us. Same-store sales -- we are building and investing in major new sales layers which are improving our brand positions over the long-term and will allow us to drive same-store sales growth in our existing assets and continually improve our unit economics. And return on invested capital -- and of course, we are focused as ever on being the industry leader, being an industry leader and return on invested capital and continuing to grow our global cash machine. So when you look at retail and you think okay, how about new units? I’d say Yum!'s doing a pretty damn good job. How about same-store sales? That’s where we have the most work to do and we are working very hard on the sales layers and we see significant opportunity over the long-term with our asset base and return on invested capital, I think we have a pretty good track record. So as we go forward, we believe the Yum! model is intact and is getting stronger, and all of our businesses are working on things that are going to make them better around the world. So thank you very much, appreciate you being on the call.

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