Pizza Hut 2005 Annual Report Download - page 61
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Please find page 61 of the 2005 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.AssetsheldforsaleatDecember31,2005andDecember25,
2004total$11millionand$7million,respectively,ofU.S.
property,plantandequipment,primarilyland,onwhichwe
previouslyoperatedrestaurantsandareincludedinprepaid
expenses and other current assets on our Consolidated
BalanceSheets.
Wrench Litigation We recorded income of $2million in
2005fromasettlementwithaninsurancecarrierrelatedto
theWrenchlitigation.Incomeof$14millionwasrecorded
for2004reflectingsettlementsassociatedwiththeWrench
litigationforamountslessthanpreviouslyaccruedaswell
as related insurance recoveries. Expense of $42million
wasrecordedasWrenchlitigationfor2003reflectingthe
amountsawardedtotheplaintiffandinterestthereon.See
Note21foradiscussionofWrenchlitigation.
AmeriServeandOtherCharges(Credits) AmeriServeFood
DistributionInc.(“AmeriServe”)wastheprimarydistributor
offoodandpapersuppliestoourU.S.storeswhenitfiledfor
protectionunderChapter11oftheU.S.BankruptcyCodeon
January31,2000.AplanofreorganizationforAmeriServe
(the“POR”)wasapprovedonNovember28,2000,which
resulted in, among other things, the assumption of our
distributionagreement,subjecttocertainamendments,by
McLaneCompany,Inc.DuringtheAmeriServebankruptcy
reorganizationprocess,wetookanumberofactionstoensure
continuedsupplytooursystem.Thoseactionsresultedin
significantexpensefortheCompany,primarilyrecordedin
2000. Under the POR, we are entitled to proceeds from
certainresidualassets,preferenceclaimsandotherlegal
recoveriesoftheestate.
Incomeof$2million,$16millionand$26millionwas
recordedasAmeriServeandothercharges(credits)for2005,
2004 and 2003, respectively. These amounts primarily
resulted from cash recoveries related to the AmeriServe
bankruptcyreorganizationprocess.
5.SUPPLEMENTALCASHFLOWDATA
2005 2004 2003
CashPaidfor:
Interest $132 $146 $178
Incometaxes 232 276 196
SignificantNon-CashInvesting
andFinancingActivities:
Assumptionofcapitalleases
relatedtotheacquisitionof
restaurantsfromfranchisees — 8 —
Capitalleaseobligationsincurred
toacquireassets 7 13 9
Debtreductionduetoamendment
ofsale-leasebackagreements — — 88
6.FRANCHISEANDLICENSEFEES
2005 2004 2003
Initialfees,includingrenewalfees $ 51 $ 43 $ 36
Initialfranchisefeesincludedin
refranchisinggains (10) (10) (5)
41 33 31
Continuingfees 1,083 986 908
$1,124 $1,019 $939
7.OTHER(INCOME)EXPENSE
2005 2004 2003
Equityincomefrominvestmentsin
unconsolidatedaffiliates $(51) $(54) $(39)
Gainuponsaleofinvestmentin
unconsolidatedaffiliate(a) (11) — —
Recoveryfromsupplier(b) (20) — —
Foreignexchangenet(gain)loss 2 (1) (2)
Other(income)expense $(80) $(55) $(41)
(a)Reflectsagainrelatedtothe2005saleofourfiftypercentinterestintheentity
thatoperatedalmostallKFCsandPizzaHutsinPolandandtheCzechRepublic
toourthenpartnerintheentity,principallyforcash.Thistransactiongenerated
aone-timenetgainofapproximately$11millionforYUMascashproceeds(net
ofexpenses)ofapproximately$25millionfromthesaleofourinterestinthe
entityexceededourrecordedinvestmentinthisunconsolidatedaffiliate.
(b)Relatestoafinancialrecoveryfromasupplieringredientissueinmainland
Chinatotaling$24millionfortheyearendedDecember31,2005,$4million
ofwhichwasrecognizedthroughequityincomefrominvestmentsinunconsoli-
datedaffiliates.OurKFCbusinessinmainlandChinawasnegativelyimpacted
bytheinterruptionofproductofferingsandnegativepublicityassociatedwith
asupplieringredientissueexperiencedinlateMarch,2005.Duringtheyear
endedDecember31,2005,weenteredintoanagreementwiththesupplierfor
apartialrecoveryofourlosses.
8.PROPERTY,PLANTANDEQUIPMENT,NET
2005 2004
Land $ 567 $ 617
Buildingsandimprovements 3,094 2,957
Capitalleases,primarilybuildings 126 146
Machineryandequipment 2,399 2,337
6,186 6,057
Accumulateddepreciationandamortization (2,830) (2,618)
$ 3,356 $ 3,439
Depreciationandamortizationexpenserelatedtoproperty,
plantand equipmentwas $459million, $434millionand
$388millionin2005,2004and2003,respectively.
Yum!Brands,Inc. | 65.