Pizza Hut 2002 Annual Report Download - page 59

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PROPERTY, PLANT AND EQUIPMENT, NET
2002 2001
Land $ 621 $ 572
Buildings and improvements 2,742 2,569
Capital leases, primarily buildings 102 91
Machinery and equipment 1,736 1,628
5,201 4,860
Accumulated depreciation and amortization (2,164) (2,123)
$ 3,037 $ 2,737
Depreciation and amortization expense related to property, plant
and equipment was $357 million, $320 million and $319 million in
2002, 2001 and 2000, respectively.
GOODWILL AND INTANGIBLE ASSETS
The Company’s business combinations have included acquiring
restaurants from our franchisees. Prior to the adoption of SFAS 141,
the primary intangible asset to which we generally allocated value
NOTE
12
NOTE
11
in these business combinations was reacquired franchise rights.
We determined that reacquired franchise rights did not meet the
criteria of SFAS 141 to be recognized as an asset apart from good-
will. Accordingly, on December 30, 2001, we reclassified $241
million of reacquired franchise rights to goodwill, net of related
deferred tax liabilities of $53 million.
The changes in the carrying amount of goodwill, net for the
year ended December 28, 2002 is as follows:
Inter-
U.S. national Worldwide
Balance as of December 29, 2001 $ 21 $ 38 $ 59
Reclassification of reacquired
franchise rights(a) 145 96 241
Impairment(b)
—
(5) (5)
Acquisitions, disposals and other, net(c) 206 (16) 190
Balance as of December 28, 2002 $ 372 $ 113 $ 485
(a) Amounts reported net of deferred tax liabilities of $27 million for the U.S. and $26 mil-
lion for International.
(b) Represents impairment of the goodwill of the Pizza Hut France reporting unit.
Impairment was recorded in connection with our annual impairment review performed
as of the beginning of the fourth quarter, and resulted from the poor performance of
the Pizza Hut France reporting unit during 2002.
(c) Includes goodwill related to the YGR purchase price allocation. For International,
includes a $13 million transfer of goodwill to assets held for sale (see Note 7).
57.
Yum! Brands Inc.
Intangible assets, net for the years ended 2002 and 2001 are as follows:
2002 2001
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
Amortized intangible assets
Franchise contract rights $ 135 $ (43) $ 102 $ (40)
Favorable operating leases 21 (13) 13 (11)
Pension-related intangible 18
—
8
—
Other 26 (23) 23 (21)
$ 200 $ (79) $ 146 $ (72)
Unamortized intangible assets
Brand/Trademarks $ 243 $31