May 02, 2018 • 08:15 am ET



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Good morning. My name is Shelby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Yum! Brands Q1 2018 First Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

I would now like to turn the call over to Mr. Keith Siegner, Vice President of Investor Relations and Treasurer. Please go ahead, sir.

Keith Siegner

Thank you, Shelby. Good morning, everyone, and thank you for joining us. On our call today are Greg Creed, our CEO; David Gibbs, our President and CFO; and Dave Russell, our Senior Vice President and Corporate Controller. Following remarks from Greg and David, we'll open the call to questions.

Before we get started, I'd like to remind you that this conference call includes forward-looking statements. Forward-looking statements are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. In addition, please refer to the Investors section of the Yum! Brands' website,, to find disclosures and reconciliations of non-GAAP financial measures that may be used on today's call.

Please note the following regarding our basis of presentation for today's call. First, system sales results exclude the impact of foreign currency. Second, core operating profit growth figures exclude the impact of foreign currency and special items. And third, the revenue recognition accounting standard was prospectively adopted on January 1st. As a reminder, this is a GAAP required change adjusting the timing of recognition of upfront fees received from and incentive payments made to franchisees, the effect of which have no impact on cash. In addition, it requires the gross-up of advertising fund revenues and offsetting expenses within our income statement.

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'd like to make you aware of the following changes in upcoming Yum! Investor events. Disclosures pertaining to outstanding debt in our Restricted Group capital structure will be provided at the time of the first quarter Form 10-Q filing. Second quarter earnings will be released on August 2nd, with the conference call on the same day. The remainder of our 2018 key earnings dates are available on the website. Artie Starrs, Pizza Hut US President, will be presenting on June 20 at the Oppenheimer 18th Annual Consumer Conference in Boston, Massachusetts.

And now, I'd like to turn the call over to Mr. Greg Creed.

Greg Creed

Thank you, Keith, and good morning, everyone. Yum! Brands delivered first quarter system sales growth of 4% in constant currency, including 1% same-store sales growth