Yum! 2010 Annual Report

#4
Drive Industry-Leading Long-Term
Shareholder and Franchisee Value.
We are extremely proud our share price increased 40% in 2010, rewarding
shareholders for our performance in the marketplace. We’re also proud we continue
to be a leader among consumer companies with Return On Invested Capital (ROIC) at
20%+. We are definitely a global cash machine, with each of our divisions generating
free cash flow — and effectively funding their own capital investments. As this capital
is deployed to high-growth emerging markets such as China, India and Russia,
we expect total returns to remain strong. These returns will further improve as we
continue to refranchise restaurants, as we have in the US, Mexico and Taiwan, which
will increase our franchise fees with minimal capital investment. We are one of the
unique companies that can CONTINUE to make significant capital investments year
after year (about $800 million) AND pay a meaningful dividend (2.4% yield) AND
grow EPS in double digits (17%) AND make investments in share repurchases with
excess cash flows. You should know that we have a very strong balance sheet that
gives us plenty of insulation from any unforeseen challenge. Bottom line, any way you
look at it, Yum! Brands is in strong financial shape.