Pizza Hut 2006 Annual Report Download - page 32

37
Inter-
national China
2005 U.S. Division Division Worldwide
Decreased restaurant profit $ (22) $ (34) $ (1) $ (57)
Increased franchise fees 8 13 — 21
Decreased general and
administrative expenses 1 10 — 11
Increase (decrease) in
operating profit $ (13) $ (11) $ (1) $ (25)
Results of Operations
% B/(W) % B/(W)
2006 vs. 2005 2005 vs. 2004
Company sales $ 8,365 2 $ 8,225 3
Franchise and license
fees 1,196 7 1,124 10
Total revenues $ 9,561 2 $ 9,349 4
Company restaurant
profit $ 1,271 10 $ 1,155 —
% of Company sales 15.2% 1.2ppts. 14.0% (0.5)ppts.
Operating profit 1,262 9 1,153 —
Interest expense, net 154 (22) 127 2
Income tax provision 284 (7) 264 7
Net income $ 824 8 $ 762 3
Diluted earnings
per share(a) $ 2.92 14 $ 2.55 5
(a) See Note 3 for the number of shares used in this calculation.
Restaurant Unit Activity
Uncon- Total
solidated Excluding
Worldwide Company Affiliates Franchisees Licensees
Balance at end of 2004 7,759 1,664 21,859 31,282
New Builds 470 160 924 1,554
Acquisitions 1 — (1) —
Refranchising (382) (142) 522 (2)
Closures (246) (35) (664) (945)
Other (15) 1 26 12
Balance at end of 2005 7,587 1,648 22,666 31,901
New Builds 426 136 953 1,515
Acquisitions 556 (541) (15) —
Refranchising (622) (1) 626 3
Closures (214) (33) (675) (922)
Other 3 (3) (39) (39)
Balance at end of 2006 7,736 1,206 23,516 32,458
% of Total 24% 4% 72% 100%
The above total excludes 2,137 and 2,376 licensed units
at the end of 2006 and 2005, respectively. The worldwide
total excludes 46 units from the acquisition of the Rostik’s
brand (see Note 10) that have not yet been co-branded into
Rostik’s/KFC restaurants. These units will be presented as
franchisee new builds as the co-branding into Rostik’s/KFC
restaurants occurs. Balances at the end of 2004 for the world-
wide and China unit activity have been adjusted to include
December 2004 activity in mainland China due to the change
in its reporting calendar. The net change was an addition of
16, 2, 1 and 19 units for company, unconsolidated affiliates,
franchisees and total, respectively.
Uncon- Total
solidated Excluding
United States Company Affiliates Franchisees Licensees
Balance at end of 2004 4,989 — 13,482 18,471
New Builds 125 — 240 365
Acquisitions — — — —
Refranchising (244) — 242 (2)
Closures (174) — (364) (538)
Other (10) — 5 (5)
Balance at end of 2005 4,686 — 13,605 18,291
New Builds 99 — 235 334
Acquisitions — — — —
Refranchising (452) — 455 3
Closures (124) — (368) (492)
Other 3 — (22) (19)
Balance at end of 2006 4,212 — 13,905 18,117
% of Total 23% — 77% 100%
The above total excludes 1,944 and 2,181 licensed units at
the end of 2006 and 2005, respectively.
Uncon- Total
solidated Excluding
International Division Company Affiliates Franchisees Licensees
Balance at end of 2004 1,504 1,204 8,179 10,887
New Builds 53 61 666 780
Acquisitions 1 — (1) —
Refranchising (137) (142) 279 —
Closures (41) (28) (292) (361)
Other (5) 1 17 13
Balance at end of 2005 1,375 1,096 8,848 11,319
New Builds 47 35 703 785
Acquisitions 555 (541) (14) —
Refranchising (168) (1) 169 —
Closures (47) (25) (303) (375)
Other — (3) (16) (19)
Balance at end of 2006 1,762 561 9,387 11,710
% of Total 15% 5% 80% 100%
The above totals exclude 193 and 195 licensed units at the
end of 2006 and 2005, respectively. The International Division
total excludes 46 units from the acquisition of the Rostik’s
brand (see Note 10) that have not yet been co-branded into
Rostik’s/KFC restaurants. These units will be presented as
franchisee new builds as the co-branding into Rostik’s/KFC
restaurants occurs.