Keith R. Siegner - Yum! Brands, Inc. Greg Creed - Yum! Brands, Inc. David W. Gibbs - Yum! Brands, Inc.

Alexander J. Mergard - JPMorgan Securities LLC David Palmer - RBC Capital Markets LLC Brian Bittner - Oppenheimer & Co., Inc. Sara Harkavy Senatore - Sanford C. Bernstein & Co. LLC John Glass - Morgan Stanley & Co. LLC Gregory Paul Francfort - Bank of America Merrill Lynch Jeffrey Bernstein - Barclays Capital, Inc. David E. Tarantino - Robert W. Baird & Co., Inc. Carla M. Casella - JPMorgan Securities LLC David Richard Hargreaves - Stifel, Nicolaus & Co., Inc. John William Ivankoe - JPMorgan Securities LLC

Good morning. My name is Amy and I will be your conference operator today. At this time, I would like to welcome everyone to Yum! Brands' Fourth Quarter 2016 Earnings Conference 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. Thank you. Vice President Investor Relations and Corporate Strategy, Keith Siegner, you may begin your conference. Keith R. Siegner - Yum! Brands, Inc.: Thanks, Amy. Good morning everyone and thank you for joining us. On our call today are Greg Creed, our CEO and David Gibbs, our President and CFO. Following remarks from Greg and David, we will 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 Investor sections 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 and include our impact of 53rd week unless otherwise noted. Second, core operating profit amounts include the impact of our 53rd week unless otherwise noted. Third, our full-year 2016 and 2015 KFC and Pizza Hut Division results have been restated to include a China license fee for comparability. We're 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 would like to make you aware of the following changes and upcoming Yum! investor events. As noted in the earnings release, we are changing the financial reporting calendar to consolidate quarter end dates across the globe to gain efficiencies in our reporting systems. Yum! Corporate will now follow a calendar year beginning in 2017. Further, an 8-K will be filed by the beginning of April with full pro forma results. First-quarter 2017 earnings will be released on Wednesday, May 3 with the conference call following on the same day. The remainder of our 2017 key earnings dates are available on our website. This year, we will be hosting brand days in place of our annual investor and analyst event. The first will be Taco Bell, May 24 and 25 in Irvine, California. Further details will be provided at a later date. Now, I would like to turn the call over to Mr. Greg Creed. Greg Creed - Yum! Brands, Inc.: Thank you Keith and good morning, everyone. Given the weather that I see in the Northeast this morning, I am pleased that you could join us today as we share with you a review of our results and discuss the future opportunities for Yum! Brands. 2016 was truly a landmark year. On October 31, we completed the spinoff of the China business. This marked the largest strategic initiative undertaken by Yum! since our spinoff from Pepsi 20 years ago. I'd like to recognize the work, effort, and diligence across the organization that enabled us to complete the spinoff on time and with such success. The spinoff and concurrent return of $6.2 billion to shareholders in 2016 concluded step one in our transformation. We all want to extend a heartfelt congratulations to the Yum! China team on completing their first quarter as an independent public company. Micky, Ted, and the China team did a great job on their call Tuesday evening and we congratulate Joey on her promotion to President and Chief Operating Officer. Step two of our transformation centers around executing our multiyear strategy to accelerate growth, reduce volatility and increase capital returns to shareholders. We are taking our franchise ownership to the next level and are on track to increase our franchise mix to at least 98% by the end of 2018. By the end of this transformation, we'll own less than 1,000 stores, reduce annual run rate capital expenditures to approximately $100 million and improve our efficiency by lowering G&A as a percent of system sales to 1.7%. In combination, these efforts will not only enable us to reduce the volatility of our cash flows, but improve absolute cash flow at the same time. I'm really happy to reaffirm the long-term targets we set out at our October investor and analyst conference, and I look forward to sharing highlights with you, as we progress. Simultaneously, we're strengthening the foundation underlying each of our businesses, changing our mentality to align with our growth transformation and taking the necessary bold actions to position Yum! Brands for even stronger same-store sales and net new unit growth. These are the building blocks of shareholder value creation for a world-class franchisor. We're championing the customer experience like never before, and putting a fierce emphasis on building brands. The linchpin in all of this, of course, is our focused strategy. I'm a firm believer in the power of focus and believe that we can deliver long-term, sustainable results by honing in on the key drivers of our business. Our four growth capabilities define every decision and action we undertake and make no mistake, they are driving our business every single day. We will win consistently by concentrating on being the best in the world with distinctive relevant brands, unmatched franchise operating capability, bold restaurant development and unrivaled culture and talent. I am energized to lead such a talented team that is spearheading tangible change across our organization. As we outlined at our October investor conference, we're building a stronger growth machine and are well on our way towards our bold goal of 7% annual system sales growth. Now turning to our financial results, across many metrics, Yum! delivered a strong tier 2016. Core operating profit increased 27% in the quarter and 13% in the year. This exceeded both our October 2016 investor and analyst conference guidance and our long-term target of high single-digit annual growth. Now with this in mind, let's review each division's results. First, KFC, whose consistent global performance is impressive. The division grew total system sales 7% in 2016, including the 53rd week, driven by 3% same-store sales growth and 3% net new unit growth. In the quarter, same-store sales grew 3% or 6% on a two-year stack and core operating profit grew 15%, including the 53rd week. Total system sales grew 8% in emerging markets for the year, with particular strength in Russia and Continental Europe. In international developed markets, total system sales grew 6% with strength in Canada, Australia and Continental Europe. I'd like to point out that the U.S. continued its positive momentum, recording its 10th consecutive quarter of same-store sales growth. The team deserves a lot of credit for delivering remarkable fourth-quarter comps of plus 4% or plus 7% on a two-year stack despite difficult industry backdrop. KFC global strategy to return to the fundamentals across the spectrum is paying off. Our strong pride in the core original recipe is at the center of everything we do and this translates to a focus on the basics in terms of recipe, a well-defined brand positioning, globally based on always original and clear value at memorable price points. Innovation closest to the core is resonating with the consumer. Just look at Nashville Hot and the recently launched Georgia Gold. We did not change the form of our product, only the flavor profile and our customers love it. As we look into 2017 and the future of KFC, I am encouraged by the opportunities we see worldwide. The brand is focused on convenience, making it easier to access KFC anyplace and in any way. For example, we are using flexible footprints, which increase the ease of unit development. With smaller asset types, we can build restaurants in places such as transportation hubs and urban centers. And KFC is also making a big push on the digital front in 2017 with self-ordering kiosks and a mobile site. Finally, the brand is expanding delivery around the world. Our product has a very shareable occasion and travels incredibly well, which gives us confidence in the upside of this opportunity. In fact, delivery is the fastest growing channel in the business, and while we offer delivery out of more than 5,000 restaurants today, we plan to expand this even further. Now turning to Pizza Hut, which grew total system sales 2% in 2016, including the 53rd week, driven by 2% net new unit growth, but offset by a 1% contraction in the same-store sales. Pizza Hut is a strong global brand, but the U.S. and international are two distinct stories. We're pleased that our international division is laying the groundwork for prolonged growth, and we're particularly invigorated by the team's ability to drive development. Net new units grew 6% in 2016 and we expect continued growth as the development agreements signed last year take hold. You have already heard from Yum! China about its plans, but here are a few other examples. In 2016, we signed a substantial development agreement for Central and Eastern Europe. Separately, we signed a master franchise agreement in Australia, where we're excited our new partner opportunistically acquired another pizza chain, shortly thereafter will converge into Pizza Hut over time. At the same time, we are implementing our repeatable model to spread best practices around the world. We've developed a strategy where we improve taste, experience and our value proposition all while clarifying our brand message in order to ensure profitable, strong, transaction-driven unit level economics. We are taking our learnings from the success of Thailand where we grew same-store sales at least 20% for three consecutive quarters in 2016 to other markets. Korea, for example, has had several months of improvement. Malaysia is in the early days of success and others are implementing it, as we speak. We believe there is a significant opportunity for Pizza Hut International to accelerate top-line and unit growth, and look forward to delivering results consistent with these strategies. On the other hand, Pizza Hut U.S., which is roughly 10% of total Yum! operating profit, is clearly in turnaround mode. The quarter's results disappointed and are not acceptable. We have undertaken an extensive study of the business utilizing outside experts and found a number of areas where we need to improve in order to take our fair share of growth in this market. These areas include improvements in the digital experience, delivery times, point-of-sale system simplification, and asset optimization, among others. As with all turnarounds, this is a journey we need to undertake hand in hand with our franchise partners and will not be complete in 2017. We will share specifics of the plan in time as we implement them, but let me be clear, we see the market share opportunity in this category. We will execute initiatives across all aspects of the customer experience to capture our fair share and more, and I'm certain we have the ability and the determination to accomplish this. We've confronted challenges in all of our brands in the past and always overcome them. Most recently, we executed a successful turnaround of our U.S. KFC business, so stay tuned as we have more updates while we deliver on our plans. And finally, Taco Bell delivered a solid 2016 with system sales growth of 6%, including the 53rd week, driven by net new unit growth of 3%, and same-store sales growth of 2%. Taco Bell continued to outperform the category in the fourth quarter, with same-store sales of 3% or 7% on a two-year stack. The brand's value-driven, innovation-focused model once again proved its merit and I'm pleased with the team's ability to deliver solid results, despite difficult industry conditions. In the quarter, Taco Bell saw particular success with the $1 all day messaging and the rolled chicken tacos. As we look to 2017, we're energized by Taco Bell's high/low value strategy and its innovative marketing calendar, including the $1 double stack tacos and the highly-anticipated Naked Chicken Chalupa, which is off to a great start. On the international front, Taco Bell continues to build momentum. We opened 53 new restaurants, another record year of development. We saw strong fourth quarter same-store sales performance in Canada, Spain, and the Philippines. The brand launched in Brazil with five new stores in only three months and we're thrilled with the consumer enthusiasm for the Taco Bell in China, which recently opened and is off to a great start. In fact, I'll be visiting this critical market in March and we're already looking for ways to work together with Yum! China to accelerate the growth of Taco Bell going forward. In closing, I'm excited about the future of Yum! and the plans we have to unlock shareholder value. KFC and Taco Bell sustained a category defying momentum from December into the new year, which gives me confidence in our 2017 guidance, which David will outline in a few minutes. Every brand is working to improve the key drivers of our business, same-store sales and net new units. We are more focused than ever on collaboration, brand building, and translating this to profitable results for the long term. The path is never linear, but we're relentlessly pursuing our vision of a world with more Yum!. Now, before I turn the call over to David, I'd like to take a moment on behalf of everyone at Yum! to express our sympathy for Joe Buckley's family, friends, and colleagues at Bank of America and in the restaurant community. Joe will be sorely missed. With that, David, over to you. David W. Gibbs - Yum! Brands, Inc.: Thank you Greg and good morning, everyone. I'd like to echo Greg's sentiments regarding Joe Buckley. Beginning with my days as a division CFO, I got to know many in the analyst community, including Joe. I always admired him and looked forward to our conversations. Not only did he have great industry insights, but he always had a smile and a kind word. All of us at Yum! felt this way and we send our condolences to his friends and family. Today, I'll cover four areas in my following remarks. Our multi-year strategic transformation, our 2016 accomplishments and fourth-quarter operating results, our outlook for 2017 and an update on our refranchising and capital return plan. I'll start by emphasizing what Greg said at the beginning of his remarks. We're on a journey towards becoming one of a kind, global franchisor with a highly attractive and predictable free cash flow growth profile. By the end of this transformation, we'll own less than 1,000 stores, reduce annual run rate capital expenditures to approximately $100 million, improve our efficiency by lowering G&A to 1.7% of system sales and increase free cash flow conversion to 100%. As we shared at our October investor and analyst event, much of the EPS growth through 2019 comes from factors that are in our control; new unit growth, G&A reductions, refranchising efforts, and share buybacks. While our long-term guidance doesn't require our system sales growth to reach 7%, we're laying the groundwork to reach this bold goal with same-store sales and unit growth, only adding to my confidence in our ability to deliver on our long-term guidance. Now let's review what Yum! Brands achieved in 2016. First, we completed the spinoff of our China business. We're pleased that Yum! China is set up for success as a powerful, independent growth company, and look forward to maintaining our strong relationships with them as we both work towards our common goals. Second, we completed $6.9 billion of debt financing transactions at very attractive rates. The average rate in our total debt outstanding is approximately 4.75%, with an average maturity of eight years. 90% of our $9.1 billion of total debt outstanding is fixed. We're now managing a capital structure, which is levered in line with our target of five times EBITDA, and which we believe provides an attractive balance between optimized interest rates, duration and flexibility. Third, we returned over $6 billion to shareholders, including share repurchases and dividends, slightly ahead of our original plans. We bought back 58.8 million shares prior to spin at an average price of $83 and an additional 9.1 million shares post spin at an average price of $63. And as many of you have seen, we announced our first quarterly dividend as new Yum! with a target payout ratio of roughly 45% to 50% of net income. Last, but not least, we exceeded our new Yum! core operating profit growth guidance of 10%, as provided at our October investor and analyst conference. Core operating profit grew 13%, including the 53rd week, with a strong fourth quarter of profit growth across all our brands. Note all numbers we reference today assume a license fee from China for the entire year and are based on restated 2015 numbers to make the comparisons apples-to-apples. So 2016, really was an exceptional year. Now let's take a high-level look at our fourth-quarter performance. We're pleased the Yum! Brands delivered year-over-year core operating profit growth of 27% in the quarter, including the 53rd week. This was led by 27% growth at Taco Bell, 21% growth at Pizza Hut, and 15% growth at KFC. We were also pleased to see KFC and Taco Bell's third quarter outperformance of the category continue into the fourth quarter. As Greg already discussed, Pizza Hut International is gaining momentum and we are in the midst of executing a plan to turnaround the Pizza Hut U.S. business. Overall, EPS from continuing operations before special items grew 19%, including a negative 3 percentage point impact from foreign currency changes. Now I'd like to discuss our outlook. We're confident in our three-year plans and there's no change to our long-term guidance. Given an encouraging start to 2017 with continued momentum at Taco Bell and KFC, we see 2017 as a year where our underlying base business grows operating profits at a healthy high single-digit rate, entirely consistent with our three-year plan. Underpinning this high single-digit base operating profit growth, we're forecasting 2% to 3% global system-wide same-store sales growth and 3% global net new unit growth with each division increasing their pace of development compared to 2016. Combined, we expect global system sales growth of at least 5%, excluding the impact of FX. CapEx is expected to be between $350 million and $400 million. I want to note that given two discrete items, which I'll outline momentarily, our underlying high-single digit base operating profit growth will likely come in closer to mid-single-digits in 2017 on a reported core operating profit basis. As a reminder, core operating profit growth only excludes FX and special items. First, the 53rd week lap is an approximate 1.5 percentage point drag on operating profit growth, just like it was a tailwind to our 2016 results. Second, we anticipate a mismatch in timing between lost profits from refranchising and the removal of associated G&A, which we expected heading into our transformation. This mismatch is purely timing-related and we estimate a headwind of approximately 1 to 2 percentage points to operating profit growth this year. This is particularly the case in international markets where the benefit of reduced expenses tied to refranchising can trail the actual sale of the restaurants. The magnitude of impact will vary depending on the pacing and sequencing of refranchising by brand and by market, and we'll update you as the year progresses. Again, this is calendar and timing, not base business results, and entirely consistent with our expectations and the plan we laid out in October. Given the potential range of refranchising gains that could occur, we don't believe meaningful GAAP operating profit growth guidance can be provided at this time, as it is difficult to forecast when specific refranchising transactions might occur due to market and other conditions. We continue to estimate that by completion of the strategic transformation, the overall impact of refranchising and G&A efficiencies on operating profit will be roughly neutral. And while there will likely be interim noise to operating profit owing to timing factors, operating margins, capital returns to shareholders, and free cash flow conversion all benefit immediately. Switching to capital returns, over the next three years, we are committed to returning an additional $6.5 billion to $7 billion to shareholders through share repurchases and dividends. We'll achieve this through a combination of refranchising proceeds, free cash flow generation, and maintaining our five times leverage. All in, we are targeting over $13.5 billion of capital return during our transformation, which spans from the fourth quarter of 2015, where we announced our intention to separate into two companies, through 2019 year-end. Now, with regards to refranchising, we've committed to becoming at least 98% franchised by the end of 2018. As of the end of 2016, we were 93% franchised. During 2016, we refranchised 427 restaurants, excluding China. In the fourth quarter, specifically, we refranchised 232 stores, including 120 KFCs, 83 Pizza Huts, and 29 Taco Bells. We won't provide interim targets as we work towards reaching our new franchise mix of at least 98%. I remain extremely confident in our ability to deliver on our stated target by 2018 year-end. Now, I'd like to talk about our capital structure. As part of our strategic transformation, we increased our leverage to about five times EBITDA last year. Should market conditions and/or government policies potentially change, we'll optimize and refine our positioning to ensure we're making the best decisions for our business and stakeholders. But at this time, we're happy with our capital structure and remain committed to maintaining this leverage profile. So to wrap things up, we are pleased with our accomplishments in 2016 and with the progress we've made to date on implementing our strategic transformation. Fourth-quarter operating profit growth was solid and ahead of expectations while the new year has gotten off to a good start for both Taco Bell and KFC. I'm very confident in the strength of our business model, and am certain we're taking the appropriate actions to ensure it optimizes shareholder value. We believe the disciplined decisions we're making today, coupled with the multiple actions taken in 2016, set us up for strength over the near and long term. And with that, the team and I are happy to take your questions.

At this time, we will be conducting our question-and-answer session. Your first question comes from the line of John Ivankoe with JPMorgan. John, your line is open. Alexander J. Mergard - JPMorgan Securities LLC: Hi, this is Alex on for John. I was hoping you could talk a little bit about your fiscal 2019 EPS goal, and given significant FX headwinds and kind of the turnaround at Pizza Hut, is there any ability for you to flex a little bit more on G&A, perhaps below the 1.7% goal? David W. Gibbs - Yum! Brands, Inc.: As far as the 2019 target for EPS, obviously, there are some FX headwinds to that, that are setting us back, but our interest rate has come in a little bit better than we expected, so there'll be pluses and minuses as we go along the journey. And as far as our pressure on G&A, I'm really pleased that the organization has embraced our effort to get more efficient and we're certainly looking for G&A efficiencies continuously as we go forward on this journey, but at this time, our long-term guidance remains the same. Alexander J. Mergard - JPMorgan Securities LLC: All right. Thank you.

Your next question comes from the line of David Palmer with RBC Capital Markets. David, your line is open. David Palmer - RBC Capital Markets LLC: Thanks. Just a follow-up on your comment on EPS growth first. If we look at your three-year target, and if we go out to that 3.75%, that's a lot of EPS growth relative to the comments you made on 2017. How do you think about 2018 and 2019 just conceptually in terms of growth versus 2017? And about unit growth specifically, you talked about a modest acceleration in 2017 on unit growth. How are you thinking about that and what are you doing to stimulate unit growth further? Thanks. Greg Creed - Yum! Brands, Inc.: Obviously, our bold goal, David, is 7% system sales growth and as David outlined, we believe we can get to 2% to 3% same-store sales growth next year and 3% development. I think what's very clear is that we are much more focused on these two. So, as I work with the leaders in the organization, I would say we've raised the awareness on the importance of net new unit growth, not just in the U.S., but outside. In that context, obviously, we had a very strong year at Taco Bell. Obviously, at KFC in the U.S., we've been a net closer. I believe that by the time we get to the end of 2019, we will be a net builder of new units at KFC, so I think that will be a turnaround. We have signed significant development agreements with Pizza Hut International with a number of franchisees around the world. These are in the order of magnitude of 200 to 300 restaurants over like five years. And I think that on the KFC front, our ability to continue to penetrate in emerging markets remains. So I feel very good about our ability to continually grow our net new unit growth, and I think there's an equal focus on same-store sales growth, getting back to really understanding consumer insights, really getting to what makes the consumer different, and really understanding that what we're delivering is a food experience, not just food. And I think all of that will help us enormously. And so, I feel confident that I think we probably grew system sales around 4% last year. We are tithing at least 5% this year and I think we're definitely on our way to delivering close to the bold goal of 7% by the end of 2019.

Your next question comes from Brian Bittner with Oppenheimer & Co. Brian, your line is open. Brian Bittner - Oppenheimer & Co., Inc.: Thanks. Thanks very much. Kind of piggybacking on these questions around 2019 EPS, when you think about that plan to get there, you mentioned that you don't need 7% system wide sales growth to get there, even though that's one of your goals. So maybe you could talk about what is the system sales growth required given what you know today about all the financial controllables that you have much more certainty about. That's the first question. The second question to Greg. I was just wondering if you can take a step back and maybe talk from a high level what you really think the biggest changes taking place within the Company are as you see it as you transform pretty rapidly here from an operating company to more of a franchise company. I mean I think we see all the external, but financial benefits obviously, but maybe you can touch on some of the other points and maybe why that is giving you the confidence in the acceleration in systemwide sales growth. David W. Gibbs - Yum! Brands, Inc.: Yes, as far as the components of our journey to the 2019 EPS guidance, as we've said before, we're not going to get into specific details around sales guidance, for example, other than to just say that they're reasonable assumptions consistent with historical and our modest expectations for it going forward. I'll just remind everybody that share repurchases, things that are very much in our control, make up the vast majority of this journey, which is why we have confidence in being able to hit the targets. Greg Creed - Yum! Brands, Inc.: Yes, and to answer the second question. I think there's really three things, Brian. I think the first one is we are much more focused as an organization. We are absolutely focused on driving same-store sales, net new unit and, obviously, shareholder returns. I think there's four areas that we are more focused in building distinct and relevant brands, obviously, enhancing our franchise capability, this bold asset development and unrivaled culture and talent. And internally, even as we did the 2017 AOP, it was very clear across all the divisions that they are more focused on these four things, which we believe will ultimately lead to stronger system sales growth. I think the second thing is, we're running the organizations really through what I call a global leadership team. So, it's not just the Yum! executive team, but we meet monthly as a global leadership team, which is obviously the division CEOs and Presidents. And I think the last meeting, which we had two weeks ago, they remain incredibly confident and optimistic about both 2017, as well as hitting all the three-year transformation plans. And then the last one is, we're going to have our first global leadership conference in five years in about a month. This will be bringing the top 200 leaders of the organization together. And essentially, the core of this meeting is about how do we go from good to great? How do we go from growing 5% system sales and get to 7%? And my objective is to use those 200 leaders to essentially be co-authors of this growth because we are going to have to do things differently. We are going to have to be bolder and I want them to co-author that sort of how. I know they are excited about it and I believe that we will leave with everyone having absolutely clear clarity on what we are doing on the focus that we are changing, and I think, hopefully bolder and more courageous decisions that will get us from sort of 4% to 5% system sales growth to the 7% number, which our bold goal. Keith R. Siegner - Yum! Brands, Inc.: Next question, please.

Your next question comes from the line of Sara Senatore with Bernstein. Sara, your line is open. Sara Harkavy Senatore - Sanford C. Bernstein & Co. LLC: Hi, Thank you very much. I wanted to ask about Pizza Hut, if I could, because, obviously, I think that's the one where you see the most opportunities to improve. But I guess you said, Pizza Hut is really a tale of two markets, but if I look even across globally, it is the softest business. So, my questions are what are the opportunities here? I mean are there specific markets that you could point to that really set a path and are very strong and where you could share best practices? And if you can't reaccelerate Pizza Hut, can you still deliver against your targets? Is there a strategy to refranchise that to 100%? Can you help sort of quantify the opportunities and challenges for that? Thank you. Greg Creed - Yum! Brands, Inc.: Sure, Sara. So let me just say, I think we did deliver 6% net new unit growth in Pizza Hut International last year and I know the team because of the development agreements we've already signed, very, very confident that we continue to grow net new units in the Pizza Hut world. There are some very good examples, as you mentioned, about what we are calling the repeatable model. So in Thailand, we've turned that business around. I think we've delivered at least 18% sales growth for three quarters in a row. We've obviously captured what we've done there, and as I alluded in my remarks, taking that to Korea and Malaysia. I'm excited about the master franchise agreement that we've done in Australia. The results in Australia have improved markedly. I happened to meet with the master franchisee when I was there in December. I'm very impressed and I think that you will see both stronger same-store sales growth, as well as, as I said in my remarks, the opportunistic ability to acquire another pizza company and transform those assets into Pizza Hut. So on the international side, I feel very good that we have captured the repeatable model, the things that work, and that we have an accelerating net new unit model in place. In the U.S., I think it's very clear. In fact, the way I look at it, I go back to what is the underpinning of why Taco Bell had a pretty successful 10-year run and what is it that helped us turn around the U.S. KFC business? I think it's really two things. It's the partnership and relationship we have with the franchisees and that then leading to an aligned long-term strategy. And so, I think if you – if I look at Taco Bell, I think our relationship with our franchisees is world-class and that enables us not to be in a week-to-week, month-to-month planning cycle, but to be really looking at the long-term and have great sort of trajection. I think, as I said on the KFC U.S. turnaround, I think Jason Marker, and the team, they changed the relationship with the franchisees, and on the basis of that change in relationship, we've now got a much more long-term sort of strategic alignment. On the Pizza Hut side, I think the good news is I know that both the franchisees and us want to replicate the results of both Taco Bell and KFC. I think both sides recognize that we need to improve the relationship and out of that relationship will become hopefully a more long-term aligned strategy. So, while there are many things to do at Pizza Hut, as we have talked about, there's assets, there's technology, there's operating systems, there's communication. I think fundamentally, when we get ourselves into an aligned long-term strategy that executes the plan, we know we've got a plan, then I believe we'll start to see an improvement in Pizza Hut. So I remain positive that we can do this. We know what's got to get done and I do believe our franchise partners at Pizza Hut want to be successful just as much as we do. David W. Gibbs - Yum! Brands, Inc.: And on the refranchising question, of the 427 units that we sold in 2016, 195 of those were U.S. Pizza Hut. So we have reduced our exposure to the U.S. Pizza Hut business a little bit. And certainly, as we go forward selling stores in Pizza Hut is part of our strategy along with the other brands. But I won't provide any more specifics on the go-forward plan, but we'll update you as we move forward on that. Sara Harkavy Senatore - Sanford C. Bernstein & Co. LLC: Thanks.

Your next question comes from the line of John Glass with Morgan Stanley. John, your line is open. John Glass - Morgan Stanley & Co. LLC: Thanks, good morning. Greg, I wanted to ask you where you think delivery fits into the strategic priorities of the company right now. It's a global phenomenon across your brands and across other brands. Can you maybe sketch out how you think about it and the prioritization, how you think about it by brand and maybe where you are on a delivery percentage of sales or however you look at it by each brand and if there's countries where you are getting best learnings? Greg Creed - Yum! Brands, Inc.: Yes, well, obviously, the Pizza Hut business is a delivery business and I think in the U.S., well, through delivery and carry out, more than 90% of the sales come from that now. So the other thing I'm really excited about is Roger's commitment to take KFC and make it more of a global delivery brand. As I said in the prepared remarks, we are already in 5,000 stores doing delivery. Obviously, we have over 20,000 KFCs. The great thing about KFC is it is perfectly set up to be delivered. There is nothing better than a bucket of Original Recipe chicken in terms of a transportation vehicle, product that holds its heat, delivers well. So, in that sense, I do believe, and I know Roger believes that accelerating delivery is a key part of it. And on Taco Bell, obviously, Brian has started to roll out Taco Bell delivery. This product isn't as well set up to be delivered as the other two brands. But what is interesting is that when people want this product, they'll have it delivered. I think we're already in about 400 stores in the U.S. It's not a huge part of the business at the moment for Taco Bell. I know that Brian and the team are committed to accelerating that. Where we do have delivery, particularly around college towns, it can actually be, I think, about 4% or 5% of sales, but still a long way to go. So, to answer your question, we're focused on it. We really have to turn Pizza Hut into a delivery brand. We're still probably well known as a dine-in brand, but the delivery brand is what we've got to change the consumer's perception. KFC, we're committed to growing delivery and we have a great product to deliver. And on Taco Bell, our customers want it; we're just going to work at how we get it to them. So, the answer is we're very focused on that, and that will be one of the drivers of growth. David W. Gibbs - Yum! Brands, Inc.: The only thing I would add is that Taco Bell is actually in over 900 stores with delivery now. And when you think about the Pizza Hut business, one of the challenges we have in the U.S. is more than half the stores are – have dining rooms attached to them and aren't really ideally set up for delivery. So that is – part of the journey at Pizza Hut is getting into more delivery-friendly assets over time. John Glass - Morgan Stanley & Co. LLC: And David, if I could just quickly follow up on G&A. I know there's going to be timing issues around refranchising in international, but you must have used the G&A number in your guidance for 2017 in the high-single digit or mid-single digit excluding these things. Can you give us some sense of where you think you are at the end of the year in G&A for 2017? David W. Gibbs - Yum! Brands, Inc.: Here's what I'll say on the G&A front. If you look at what we've released in 2016, it looks like G&A went up about $60 million. But the reality is, if you back out special, it went down about $50 million. And that's before the effect of inflation. So, we had – we made some considerable progress on G&A in 2016. In 2017, we've got a different mix of refranchising and G&A cuts that collectively is going to provide this 1 to 2 point headwind. But we're certainly on track with the plans that we had to get to the 2019 targets, and we're going to make meaningful progress on G&A in 2017, similar to the progress that we made in 2016. John Glass - Morgan Stanley & Co. LLC: Okay, that's helpful. Thank you.

Your next question comes from the line of Gregory Francfort from Bank of America. Gregory, your line is open. Gregory Paul Francfort - Bank of America Merrill Lynch: Hey, guys. Just one quick clarification. On tax rate, I think the last update you guys had given was like a 26%, 27% tax rate for the new structure, but we are a little bit below that. Is that still the right number as we look out over the next couple years, or should we think about maybe a lower number? David W. Gibbs - Yum! Brands, Inc.: No, we believe that's the right number. Obviously, there's uncertainty on that as we're seeing potential changes in policy, but that is our current guidance. Gregory Paul Francfort - Bank of America Merrill Lynch: Got it. And then just thinking about technology for the three brands, can you give an update on where you stand around common POS, digital ordering, potentially loyalty? Just sort of an update on the technology front for the different brands. Greg Creed - Yum! Brands, Inc.: Well, on Pizza Hut, hopefully by the end of the year we'll be at a single POS system in the U.S., which will help enormously. Internationally, we're looking at getting out of multiple POS systems down maybe one or two, so that will help dramatically. Taco Bell is almost at a single POS and back-of-house system, which obviously sets them up for eCommerce, digital, social. And KFC is obviously also making progress to get to a more aligned one system. That will help us do things like loyalty, which obviously are critical and important in the marketplace. It sets us up to obviously drive the social agenda, and I think all of that will lead to improved growth to the business going forward. Gregory Paul Francfort - Bank of America Merrill Lynch: Is that more of a end of 2017 and then we start thinking about some of these initiatives kicking in in 2018 around loyalty and digital ordering as you think about sort of the outlook on timing? Greg Creed - Yum! Brands, Inc.: I mean I think, well, obviously, Pizza Hut's got a very big digital ordering business today, but I think the opportunity for us to do loyalty and things like that will obviously happen once we get to this single POS system. Taco Bell already has mobile apps you can obviously order through. I think that business isn't large yet, but what it does do is actually make the brand a relevant brand. So, it's one of those things where we may not be getting a lot of business from -eCommerce on Taco Bell, it does actually reinforce that this is a millennial-centric brand. And then on KFC, yes, I think it's not going to happen any time soon, but we definitely know we need to be in the loyalty business. And so, whether it's late this year, next year, that's probably more the timing that things will occur. Gregory Paul Francfort - Bank of America Merrill Lynch: Thank you.

Your next question comes from the line of Jeffrey Bernstein with Barclays. Jeffrey, your line is open. Jeffrey Bernstein - Barclays Capital, Inc.: Great, thank you very much. I had one question and then one just reporting clarification. From a question standpoint, following up on the G&A discussion from earlier with the plans to reduce kind of to that 1.7% system sales, just wondering, as we think about the operating margins, kind of below that line, we've seen hundreds of basis points jump at each brand. Whether or not the brand is challenged or not, we've seen big jumps, which is obviously driven by the refranchising, but I am just wondering in terms of your insights, long-term goal by brand maybe, or maybe just at what point we reach a certain level where you say, you know what, it's hard to see that operating margin expand much beyond that. Just trying to see the pacing and sequencing of what appear to be very big jumps in the operating margin for each brand. And then just from a reporting standpoint, just to make sure that we're all on the same page, I mean it looks like for the fourth quarter of 2016, you adjusted to reflect the pro forma, assuming Yum! China was a franchise model for the period, but we should do the same presumably for the prior three quarters of 2016? I mean I think you had an 8-K out there that gave the 3Q 2016 year-to-date, but just want to make sure I didn't miss anything in terms of the first three quarters separately, so quarter one, two, and three by segment restated as if China was a franchisee for the full year. Thanks. Keith R. Siegner - Yum! Brands, Inc.: Okay, Jeff, this is Keith. First, on the margin question, good question. And, yes, this is all consistent with the plan. Post the October investor and analyst event, we put a slide up that actually showed pro forma for the whole transformation to at least 98%. What our restaurant level and EBITDA margins and EBIT margins would look like on a baseline of 2015. So, if you look at that, you can actually see pretty explicitly where we think those margins can get to within a vacuum. On the other front, yes, as I said in my introductory comments, we're going to get you pro forma results for the new fiscal year and for China, and we're shooting for early April. So, that will be full quarterly just like – look, I've been in your shoes and I know what you're looking for and what will be most useful. It is coming. We're shooting for early April. Jeffrey Bernstein - Barclays Capital, Inc.: I get it. I was under the impression from the press release that the adjustment you were giving by early April was just the realignment of the months versus kind of the periods you were using. I just want to make sure we are also talking about quarterly 2016, the first three quarters individually in terms of each quarter restated with China as a franchisee with the royalty payment coming in by segment. Keith R. Siegner - Yum! Brands, Inc.: Yes. Jeffrey Bernstein - Barclays Capital, Inc.: Okay. So, that's early April? Keith R. Siegner - Yum! Brands, Inc.: Restated for everything. Jeffrey Bernstein - Barclays Capital, Inc.: So at this point, we should be taking the year-to-date we have for the third quarter and doing our best to just kind of cut it up to come up with the first three quarters of 2016 and applying it by segment? Keith R. Siegner - Yum! Brands, Inc.: Yes. Jeffrey Bernstein - Barclays Capital, Inc.: Okay. Thank you.

Your next question comes from the line of David Tarantino with Baird. David, your line is open. David E. Tarantino - Robert W. Baird & Co., Inc.: Hi, good morning. My question is on the comps outlook for this year, 2% to 3% globally. That would be better than what you've been running in recent years, and in recent quarters. So just wondering what your degree of confidence in that outlook is as you sit here today and whether it requires some improvement at Pizza Hut or if you're assuming improvement in the other divisions. Greg Creed - Yum! Brands, Inc.: Thanks, David. It obviously is ahead of our run rate. As I think I said earlier, the organization is much more focused on two things, driving same-store sales and delivering net new units. So, I think just the amount of time we're spending on what do we need to do in order to deliver that growth, as we alluded to, obviously, both KFC and Taco Bell, took that sort of Q4 momentum into Q1. We've got the launch of Georgia Gold, you've got the launch of Naked Chicken Chalupa, and obviously, we've still got a lot of work to do on Pizza Hut. So, with the plans that we put together for the AOP, I feel really good about the plans across the brands, internationally, and in the U.S. It's nice to go into the quarter with some momentum. And I think this focus is really starting to pay off. And I'll be even more excited when we come out of the global management meeting and I've got the top 200 leaders to really help us think about what else could we do from a bold and courageous point of view in order to deliver even more same-store sales growth and even more net new unit growth. I'm really looking forward to that meeting because there's nothing better than being asked to co-author your own future. So, I feel good about that. I feel good about the plans that the divisions presented in 2017, and now we've got to go and execute, which is what we've traditionally been very good at. David E. Tarantino - Robert W. Baird & Co., Inc.: And Greg, thank you for that comment. Just to be clear, does the guidance this year or reaching the guidance this year require better performance out of Pizza Hut? Greg Creed - Yum! Brands, Inc.: Well, I think, look, our performance will differ, obviously, across the three brands. So, in averaging 2% to 3%, I have expectations that maybe one brand will do better and one will do a little less and one will do about that number. So, I'm not expecting every brand to deliver that. I think the brands that have got momentum, we can build on that. And the brand that doesn't have momentum, we've got to do a lot of work. I sat down with the Pizza Hut U.S. team yesterday. We were reviewing calendar changes for this year, which obviously, they're working with the franchise community. So, no one is sort of sitting still either. If we are having success, we're trying to build on it. If we're not having success, we are acting quickly in order to change the trend. Keith R. Siegner - Yum! Brands, Inc.: Next question, please.

Your next question comes from the line of Carla Casella with JPMorgan. Carla, your line is open. Carla M. Casella - JPMorgan Securities LLC: Hi. I'm wondering if you could just give us the baseline number for the restricted group EBITDA. I know the financials you typically put on the website, but they're not up yet. Keith R. Siegner - Yum! Brands, Inc.: Carla, we don't have that number with us right now. Give me a call afterwards and we can discuss. Carla M. Casella - JPMorgan Securities LLC: Okay, great. And then one other question. Have you seen any impact on sales internationally as when we see news from Trump that's more domestic-focused or I guess that's causing any rift with international countries? Greg Creed - Yum! Brands, Inc.: I think the easiest answer is no. I'm not seeing any impact anywhere. There's obviously a lot of discussion and speculation, but I'm not seeing any impact on our business in any country so far. Carla M. Casella - JPMorgan Securities LLC: Okay, great. Thanks.

Your next question comes from the line of David Hargreaves with Stifel. David, your line is open. David Richard Hargreaves - Stifel, Nicolaus & Co., Inc.: Hi, thanks. Yes, just to echo that last comment, if you guys could put restricted group EBITDA in the press release going forward since bondholders don't really – we've got a subordinated claim on Taco Bell performance. It would help a lot. It's hard to back into. Looking at the deltas in the cash from the third quarter to the fourth quarter, it was a big change and we will back into it in time, but I was just wondering if you could go over the major changes. It looks like you went from about $2.9 billion to $700 million. Could you talk about the big pieces there and then your comfort level with that cash balance? Thanks. Keith R. Siegner - Yum! Brands, Inc.: David, this is Keith. On November 3, we filed an 8-K showing a pro forma end of 3Q balance sheet and cash flow statement for Yum! excluding China. What you'll see is a lot of the cash you just referenced in the $2.99 billion related to China. So, we show you actually what it was, excluding China, as of the end of 3Q. Then, if you do the walk from that number to what we show at the end of 4Q, largely that is one quarter of dividend and the share repurchases that were accomplished through the quarter, as we outlined in our press release. Give me a call afterwards and we can clarify, but that should be all the pieces you need to get through the walk. David Richard Hargreaves - Stifel, Nicolaus & Co., Inc.: But the $700 million is pretty much what you'd expect to have going forward, more or less? Keith R. Siegner - Yum! Brands, Inc.: That's what we have now. Long term, in terms of cash needs, it's a little different now, given the moving pieces related to refranchising. We still have some company-operated stores. We do not need $700 million, as of now, and we'd like to knock that down over time. Historically, we've been in the $600 million to $700 million range, including China. So, it's less than that now. We'll update you as we get closer to run rate at the end of the transformation, but definitely less than the $700 million we have now. David Richard Hargreaves - Stifel, Nicolaus & Co., Inc.: Lastly, your 6.25% notes go current in March, so I'm just wondering if you're comfortable having those on the balance sheet till maturity or if you might deal with them proactively? Keith R. Siegner - Yum! Brands, Inc.: As we said, we're monitoring all market and macro conditions constantly, trying to make the best decision and get to the optimal mix of interest rate, duration and flexibility. As we said, we're comfortable with this – with our capital structure right now. If anything changes, we'll communicate that in due course. David Richard Hargreaves - Stifel, Nicolaus & Co., Inc.: Thanks very much.

Gentlemen, your last question comes from the line of John Ivankoe with JPMorgan. John, your line is open. John William Ivankoe - JPMorgan Securities LLC: Thank you, guys, so much for taking me at the end. Thanks and for the third question for JPMorgan. The question is on Pizza Hut. In your press release, 47% of Pizza Hut sales are in the U.S. David, you made a really interesting comment that half of the units in the U.S. are dine-in assets and not really set up for delivery. So you kind of have a big chunky part of your business that's not really optimized for where the consumer is and probably where the consumer is going either. So can we talk about how to isolate that red roof asset, that dine-in asset that really does kind of complicate and make the difficulty of turning around the Pizza Hut brand very different than other platforms that exist that are delivery and carry out only? David W. Gibbs - Yum! Brands, Inc.: Well, the good news, John, is that our Delco model, our small box model, is a really good economic model. The cash paybacks from building Delcos is three to four years, on average. So, we have a way to get out of those red-roof restaurants that are holding us back. And by the way, not all of them are sub-optimized for delivery. Some of them were built more recently. Some of our dine-in stores aren't even red-roofs; they were built with a newer model. So there's a mix of assets there. But we do have an economic way to get into a better asset and, Artie Starrs, the President of the Pizza Hut U.S. business is working with the franchisees on a plan to make that happen. And unlike a lot of transformations where you can introduce a new product overnight and it's a quick fix, this one takes a little bit of time. We also have a fast-casual model, which we've talked about at previous investor meetings, which really plays into the current trend in the pizza category. We are seeing a lot of growth in fast casual. We've had a lot of success with that, albeit with a small number of units. And the franchisees and the Pizza Hut management team are excited about it and using that as another option to get into an asset that's better positioned for delivery, but also can add incremental sales through lunch day parts in this fast-casual model. John William Ivankoe - JPMorgan Securities LLC: A couple of years ago, gosh, maybe it was five years ago, maybe more, you kind of drove a pretty significant contraction of KFC in the U.S. and at the back end of that contraction, you contributed some capital to KFC franchisees as well. I think it was related to ovens and maybe some other things. Do you think the Pizza Hut brand is kind of in that position where you make it a better brand, a smaller brand and perhaps you actually do step up and contribute either some OpEx or CapEx to the U.S. franchisee? Greg Creed - Yum! Brands, Inc.: I think right now we are, obviously, having a lot of discussions with the U.S. franchisees, which Artie is leading. And I think until there's an outcome, I think, as I said earlier, I think the great thing is that the U.S. Pizza Hut franchisees, as much as we do, want to obviously turn the performance around and be more like KFC and Taco Bell in the U.S. They understand that it's going to require a partnership. They understand it's going to require long-term strategic alignment. And I think how that plays out in terms of what both sides do in order to build that relationship and get ourselves strategically aligned, that is sort of, I guess, work in progress. But I am very confident that both sides want to obviously get to a better place and get this brand back into growth. John William Ivankoe - JPMorgan Securities LLC: Okay. Thank you. Thanks again, guys.

This concludes our question-and-answer session. I will now turn the call back over to Greg Creed for closing remarks. Greg Creed - Yum! Brands, Inc.: So, thanks, everybody, for being on the call. I guess for me 2016 was a landmark year. We successfully spun off Yum! China, we launched this multi-year transformation plan, and we returned $6.2 billion to shareholders. I'm very pleased with the results and a solid end to what, I think, was an extraordinary year. Core operating profit increased 27% in the quarter and 13% for the year, obviously exceeding our guidance. I remain very confident in our three-year plan. So, there's no change to our long-term guidance and I'm encouraged by the early progress we're doing to unlock growth through this sort of focused four growth drivers. We're off to a running start. I think we can accelerate growth, reduce volatility, and increase capital return to shareholders. So, I guess in summary, I'm very excited about the future of Yum! And I think we represent an extremely compelling growth story and one that investors, I hope, will buy into. So, thanks for being on the call. Thanks for coming out in the horrible weather and we look forward to speaking to you all very soon. Thanks, again.

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