Pizza Hut 2004 Annual Report Download - page 62
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Please find page 62 of the 2004 Pizza Hut annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.assetseachreportingperiod.Subsequenttotherecording
of the impairment of the A&W trademark/brand in 2003,
webeganamortizingitsremainingbalanceoveraperiodof
thirtyyears.Whilewecontinuetoincorporatedevelopment
oftheA&Wtrademark/brandintoourmultibrandingplans,
ourdecisiontonolongeroperatetheacquiredstand-alone
Company-owned A&W restaurants is considered a factor
thatlimitsitsusefullife.Accordingly,weareamortizingthe
remainingbalanceoftheA&Wtrademark/brandoveraperiod
ofthirtyyears,thetypicaltermofourmultibrandfranchise
agreementsincludingrenewals.Wecontinuetobelievethat
allofourotherrecordedtrademark/brandassets,including
theLJStrademark/brand,haveindefinitelives.
Amortizationexpensefordefinite-livedintangibleassets
was$8millionin2004,$7millionin2003and$6million
in2002.Amortizationexpensefordefinite-lived intangible
assetswillapproximate$8millionin2005and2006and
$7millionin2007through2009.
ACCOUNTSPAYABLEAND
OTHERCURRENTLIABILITIES
NOTE13
2004 2003
Accountspayable $ 414 $ 393
Accruedcompensationandbenefits 263 257
Othercurrentliabilities 483 507
$1,160 $1,157
SHORT-TERMBORROWINGSANDLONG-TERMDEBT
NOTE14
2004 2003
Short-termBorrowings
Currentmaturitiesoflong-termdebt $ 11 $ 10
Long-termDebt
Senior,UnsecuredRevolvingCreditFacility,
expiresSeptember2009 19 —
Senior,UnsecuredNotes,dueMay2005 — 351
Senior,UnsecuredNotes,dueApril2006 200 200
Senior,UnsecuredNotes,dueMay2008 251 251
Senior,UnsecuredNotes,dueApril2011 646 645
Senior,UnsecuredNotes,dueJuly2012 398 398
Capitalleaseobligations(SeeNote15) 128 112
Other,duethrough2019(6%-12%) 79 80
1,721 2,037
Lesscurrentmaturitiesoflong-termdebt (11) (10)
Long-termdebtexcludingSFAS133adjustment 1,710 2,027
Derivativeinstrumentadjustmentunder
SFAS133(SeeNote16) 21 29
Long-termdebtincludingSFAS133adjustment $1,731 $2,056
On September 7, 2004, we executed an amended and
restatedfive-yearseniorunsecuredRevolvingCreditFacility
totaling$1.0billionwhichmaturesonSeptember7,2009
(the “Credit Facility”). The Credit Facility serves as our
primarybankcreditagreementandreplacedthe$1.0billion
SeniorUnsecuredRevolvingCreditFacilitythatwassched-
uledtomatureonJune25,2005(the“OldCreditFacility”).
TheCreditFacilityisunconditionallyguaranteedbyourprin-
cipaldomesticsubsidiariesandcontainsfinancialcovenants
relatingtomaintenanceofleverageandfixedchargecoverage
ratios. The Credit Facility also contains affirmative and
negativecovenantsincluding,amongotherthings,limitations
oncertainadditionalindebtedness,guaranteesofindebted-
ness,levelofcashdividends,aggregatenon-U.S.investment
andcertainothertransactionsasdefinedintheagreement.
Thesecovenantsaresubstantiallysimilartothosecontained
intheOldCreditFacility.Wewereincompliancewithalldebt
covenantsatDecember25,2004.
Under thetermsofthe Credit Facility,we mayborrow
uptothemaximumborrowinglimitlessoutstandingletters
ofcredit.AtDecember25,2004,ourunusedCreditFacility
totaled $776million, net of outstanding letters of credit
of $205million. There were borrowings of $19million
outstandingundertheCreditFacilityattheendof2004.The
interestrateforborrowingsundertheCreditFacilityranges
from0.35%to1.625%overtheLondonInterbankOfferedRate
(“LIBOR”)or0.00%to0.20%overanAlternateBaseRate,
whichisthegreaterofthePrimeRateortheFederalFunds
EffectiveRateplus0.50%.TheexactspreadoverLIBORor
theAlternateBaseRate,asapplicable,willdependuponour
performanceunderspecifiedfinancialcriteria.Interestonany
outstandingborrowingsundertheCreditFacilityispayableat
leastquarterly.In2004,2003and2002,weexpensedfacility
feesofapproximately$4million,$6millionand$5million,
respectively.AtDecember25,2004,theweightedaverage
contractualinterestrateonborrowingsoutstandingunderthe
CreditFacilitywas2.72%.
OnNovember15,2004,wevoluntarilyredeemedallof
our7.45%SeniorUnsecuredNotesthatweredueinMay2005
(the“2005Notes”)inaccordancewiththeiroriginalterms.
The2005Notes,whichhadatotalfacevalueof$350million,
wereredeemedforapproximately$358millionusingprimarily
cashonhandaswellassomeborrowingsunderourCredit
Facility.Theredemptionamountapproximatedthecarrying
valueofthe2005Notes,includingaderivativeinstrument
adjustmentunderSFAS133,resultinginnosignificantimpact
onnetincomeuponredemption.
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