Pizza Hut 2004 Annual Report Download - page 38

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฀ ฀ Uncon-฀ ฀ Total฀
฀ ฀ solidated฀ ฀ Excluding฀
International฀ Company฀ Affiliates฀ Franchisees฀ Licensees
Balance฀at฀end฀of฀2002฀ 2,333฀ 2,144฀ 7,061฀ 11,538
New฀Builds฀ 312฀ 173฀ 623฀ 1,108
Acquisitions฀ 283฀ (736)฀ 453฀ —
Refranchising฀ (78)฀ (1)฀ 79฀ —
Closures฀ (90)฀ (74)฀ (305)฀ (469)
Other(a)฀ —฀ —฀ (6)฀ (6)
Balance฀at฀end฀of฀2003฀ 2,760฀ 1,506฀ 7,905฀ 12,171
New฀Builds฀ 311฀ 178฀ 588฀ 1,077
Acquisitions฀ 11฀ 11฀ (22)฀ —
Refranchising฀ (204)฀ —฀ 204฀ —
Closures฀ (120)฀ (25)฀ (286)฀ (431)
Other(a)฀ (4)฀ (8)฀ (13)฀ (25)
Balance฀at฀end฀of฀2004฀ 2,754฀ 1,662฀ 8,376฀ 12,792
%฀of฀Total฀ 22%฀ 13%฀ 65%฀ 100%
(a)฀Represents฀an฀adjustment฀of฀previously฀reported฀amounts.
The฀above฀totals฀exclude฀206฀licensed฀units฀at฀both฀the฀end฀
of฀2004฀and฀2003.
Included฀in฀the฀above฀totals฀are฀multibrand฀restaurants.฀
Multibrand฀conversions฀increase฀the฀sales฀and฀points฀of฀distri-
bution฀for฀the฀second฀brand฀added฀to฀a฀restaurant฀but฀do฀not฀
result฀in฀an฀additional฀unit฀count.฀Similarly,฀a฀new฀multibrand฀
restaurant,฀ while฀ increasing฀ sales฀ and฀ points฀ of฀ distribu-
tion฀for฀two฀brands,฀results฀in฀just฀one฀additional฀unit฀count.฀
Franchise฀unit฀counts฀include฀both฀franchisee฀and฀unconsoli-
dated฀affiliate฀multibrand฀units.฀Multibrand฀restaurant฀totals฀
were฀as฀follows:
฀2004
฀Company฀ Franchise฀ Total
United฀States฀ 1,391฀ 1,250฀ 2,641
International฀ 28฀ 155฀ 183
Worldwide฀ 1,419฀ 1,405฀ 2,824
฀ 2003
฀Company฀ Franchise฀ Total
United฀States฀ 1,032฀ 1,116฀ 2,148
International฀ 52฀ 127฀ 179
Worldwide฀ 1,084฀ 1,243฀ 2,327
For฀2004฀and฀ 2003,฀Company฀multibrand฀ unit฀gross฀ addi-
tions฀were฀384฀and฀235,฀respectively.฀For฀2004฀and฀2003,฀
franchise฀multibrand฀unit฀gross฀additions฀were฀169฀and฀194,฀
respectively.
SYSTEM฀SALES฀GROWTH
฀ ฀ Increase฀excluding฀฀
฀ Increase฀ currency฀translation
฀2004฀ 2003฀ 2004฀ 2003
United฀States฀ 3%฀ 3%฀ N/A฀ N/A
International฀ 15%฀ 14%฀ 9%฀ 7%
Worldwide฀ 8%฀ 7%฀ 5%฀ 5%
System฀sales฀growth฀includes฀the฀results฀of฀all฀restaurants฀
regardless฀ of฀ ownership,฀ including฀ Company-owned,฀ fran-
chise,฀unconsolidated฀affiliate฀and฀license฀restaurants.฀Sales฀
of฀franchise,฀unconsolidated฀affiliate฀and฀license฀restaurants฀
generate฀franchise฀and฀license฀fees฀for฀the฀Company฀(typically฀
at฀a฀rate฀of฀4%฀to฀6%฀of฀sales).฀Franchise,฀unconsolidated฀
affiliate฀and฀license฀restaurants฀sales฀are฀not฀included฀in฀
Company฀sales฀on฀the฀Consolidated฀Statements฀of฀Income;฀
however,฀the฀franchise฀and฀license฀fees฀are฀included฀in฀the฀
Company’s฀ revenues.฀ We฀ believe฀ system฀ sales฀ growth฀ is฀
useful฀to฀investors฀as฀a฀significant฀indicator฀of฀the฀overall฀
strength฀of฀our฀business฀as฀it฀incorporates฀all฀of฀our฀revenue฀
drivers,฀Company฀and฀franchise฀same฀store฀sales฀as฀well฀as฀
net฀unit฀development.
In฀2004,฀the฀increase฀in฀Worldwide฀system฀sales฀was฀
driven฀by฀new฀unit฀development฀and฀same฀store฀sales฀growth,฀
partially฀ offset฀ by฀ store฀ closures.฀ Excluding฀ the฀ favorable฀
impact฀from฀both฀foreign฀currency฀translation฀and฀the฀YGR฀
acquisition,฀Worldwide฀system฀sales฀increased฀3%฀in฀2003.฀
The฀increase฀was฀driven฀by฀new฀unit฀development,฀partially฀
offset฀by฀store฀closures.
In฀2004,฀the฀increase฀in฀U.S.฀system฀sales฀was฀driven฀by฀
new฀unit฀development฀and฀same฀store฀sales฀growth,฀partially฀
offset฀by฀store฀closures.฀Excluding฀the฀favorable฀impact฀of฀the฀
YGR฀acquisition,฀U.S.฀system฀sales฀increased฀1%฀in฀2003.฀
The฀increase฀was฀driven฀by฀new฀unit฀development,฀partially฀
offset฀by฀store฀closures.
In฀2004,฀the฀increase฀in฀International฀system฀sales฀was฀
driven฀by฀new฀unit฀development฀and฀same฀store฀sales฀growth,฀
partially฀offset฀by฀store฀closures.฀In฀2003,฀the฀increase฀in฀
International฀system฀sales฀was฀driven฀by฀new฀unit฀develop-
ment,฀partially฀offset฀by฀store฀closures.
REVENUES
฀ ฀ ฀ %฀Increase฀
฀ ฀ ฀ excluding฀฀
฀ ฀ ฀ currency฀฀
฀ Amount฀ %฀Increase฀ translation
฀2004฀ 2003฀ 2004฀ 2003฀ 2004฀ 2003
Company฀sales
฀ United฀States฀ $฀5,163฀ $฀5,081฀ 2฀ 6฀ N/A฀ N/A
฀ International฀ ฀2,829฀ ฀2,360฀ 20฀ 12฀ 16฀ 8
฀ Worldwide฀ ฀7,992฀ ฀7,441฀ 7฀ 8฀ 6฀ 7
Franchise฀and฀฀
license฀fees
฀ United฀States฀ ฀ 600฀ ฀ 574฀ 4฀ 1฀ N/A฀ N/A
฀ International฀ ฀ 419฀ ฀ 365฀ 15฀ 23฀ 8฀ 14
฀ Worldwide฀ ฀1,019฀ ฀ 939฀ 8฀ 9฀ 6฀ 6
Total฀revenues
฀ United฀States฀ ฀5,763฀ ฀5,655฀ 2฀ 6฀ N/A฀ N/A
฀ International฀ ฀3,248฀ ฀2,725฀ 19฀ 13฀ 15฀ 8
฀ Worldwide฀ $฀9,011฀ $฀8,380฀ 8฀ 8฀ 6฀ 7
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