YUM expects restaurant margins in China to decline to the mid-teens range in 2013,
down from 18.1% for 2012. The decline is being attributed to traffic
trends and not an increase in food, labor, or other restaurant expenses. YUM
continues to expect mid-teen labor and 3% commodity inflation in China during
2013 but is launching a comprehensive quality assurance program with its chicken
suppliers following the Chinese New Year in February.