The company expanded its global presence, increasing total units by 4% to 61,346, with 70% of units located internationally. This expansion is primarily driven by franchisees, reflecting the company's strategy to grow through an asset-light model.

The company acquired 216 KFC restaurants in the UK and Ireland for $177 million, which is expected to accelerate KFC's growth strategy in the region. This acquisition demonstrates the commitment to strategic investments in key markets.

The company completed its exit from the Russian market, selling the KFC business to Smart Service Ltd. This decision aligns with the company's values and commitment to social responsibility, redirecting profits to humanitarian efforts.

Digital sales reached $33 billion, representing over 50% of overall system sales, highlighting successful digital transformation efforts. This demonstrates the company's ability to adapt to changing consumer preferences and leverage technology to drive sales.

The company initiated a resource optimization program, resulting in $79 million in charges, to improve efficiency and reallocate resources. This program aims to enhance the company's long-term growth and profitability.

Franchise agreements with the owner and operator of KFC and Pizza Hut restaurants in Turkey were terminated after failure to meet brand standards. This action demonstrates management's commitment to maintaining brand quality and consistency.

The company acknowledges the ongoing threat of cybersecurity incidents and the potential for material impact on business and financial results. A ransomware attack in January 2023 resulted in temporary restaurant closures and data compromise, highlighting the vulnerability.

The company's reliance on Yum China for a significant portion of its revenue exposes it to risks related to political, financial, social instability, and changes in economic conditions in mainland China. Any significant deterioration in U.S.-China relations could adversely affect the Concepts in mainland China.

The company acknowledges that geopolitical events and instability, such as the conflict in the Middle East and between Russia and Ukraine, can adversely affect business and operations. These risks include economic consequences, disruptions, increased energy prices, and weaker consumer sentiment.

The retail food industry, in which the Concepts compete, is intensely competitive with respect to price and quality of food products, new product development, digital engagement, advertising levels and promotional initiatives, customer service reputation, restaurant location and attractiveness and maintenance of properties. Increased competition and other competitive factors could have an adverse effect on our business or development plans.

Competition has also increased from and been enabled by delivery aggregators and other food delivery services in recent years, particularly in urbanized areas, and such competition is expected to continue to increase. Increased competition and other competitive factors could have an adverse effect on our business or development plans.

Moreover, our failure to adequately invest in new technology or adapt to technological advancements and industry trends, particularly with respect to digital commerce capabilities, could result in a loss of customers and related market share.

The company has experienced and may continue to experience supply chain disruptions and shortages or interruptions in the supply or distribution of food items, equipment and other supplies to the Concepts' restaurants, which have adversely affected and may continue to adversely affect the business.

Our Concepts and their franchisees have experienced and may continue to experience increased labor shortages and employee turnover at many restaurants and increased competition for qualified employees, given ongoing challenging labor market conditions.

In addition, our Concepts and their franchisees have been, and will continue to be, subject to the risk of increasing union activity in the restaurant space. In the event of a strike, work slowdown or other labor unrest, the ability to adequately staff at the store level could be impaired, which could adversely impact our operations and distract management from focusing on our business and strategic priorities.

Digital and technology are at the core of our Recipe for Good Growth. In recent years the Company has focused on building and acquiring a distinctive set of solutions with next-generation capabilities tailored for our brands and scaling these common digital and technology platforms across the globe.

Additionally, we have introduced our Byte by Yum! platform, a comprehensive collection of proprietary software as a service and artificial intelligence (AI) driven products that enables easy operations for team members and improved experiences for customers, while consolidating essential systems into a cohesive, easy-to-manage platform.

Digital sales include transactions where consumers at system restaurants utilize ordering interaction that is primarily facilitated by automated technology. In 2024, our system restaurants generated digital sales of $33 billion, representing over 50% of overall system sales.

The Board of Directors authorized share repurchases of up to $2.0 billion (excluding applicable transaction fees and excise taxes) of our outstanding Common Stock through December 31, 2026. As of December 31, 2024, we have remaining capacity to repurchase up to $1.6 billion of Common Stock under this authorization.

In February 2025, our Board of Directors declared a quarterly dividend of $0.71 per share of Common Stock, a 6% increase from the quarterly dividend of $0.67 per share of Common Stock paid in 2024.

In 2025, we expect gross capital expenditures of approximately $350 million driven by technology initiatives and continued investments in Taco Bell, Habit Burger & Grill and KFC company restaurants.

We and our Concepts' franchisees are subject to heightened and evolving expectations and requirements with respect to social and environmental sustainability matters, which expose us and our Concepts' franchisees to numerous risks.

We could be adversely affected by the physical and/or transitional effects of climate change. Our and our franchisees' properties and operations may be vulnerable to the adverse effects of climate change, which is predicted to result in ongoing changes in global weather patterns and more frequent and severe weather-related events such as droughts, wildfires, hurricanes and other natural disasters.

The Company is not aware of any federal, state or local environmental laws or regulations that will materially affect our earnings or competitive position, or result in material capital expenditures.

During the fourth quarter of 2023, certain of our markets, principally in our KFC and Pizza Hut Divisions, began being impacted by a military conflict in the Middle East region. Our sales continued to be impacted during 2024, most significantly in markets across the Middle East, Malaysia and Indonesia.

As a company dependent upon consumer discretionary spending, we (and our Concepts' franchisees) are sensitive to macroeconomic conditions and consumer discretionary spending levels in markets where we and our Concepts' franchisees operate.

For example, we have been subject to a regulatory enforcement action in India alleging violation of foreign exchange laws for failure to satisfy conditions of certain operating approvals, such as minimum investment and store build requirements as well as limitations on the remittance of fees outside of the country (see Note 20).