Pizza Hut 2008 Annual Report Download - page 125

3
PART I
Item 1. Business.
YUM! Brands, Inc. (referred to herein as “YUM” or the “Company”), was incorporated under the laws of the state of
North Carolina in 1997. The principal executive offices of YUM are located at 1441 Gardiner Lane, Louisville, Kentucky
40213, and the telephone number at that location is [phone].
YUM, the registrant, together with its subsidiaries, is referred to in this Form 10-K annual report (“Form 10-K”) as the
Company. The terms “we,” “us” and “our” are also used in the Form 10-K to refer to the Company. Throughout this
Form 10-K, the terms “restaurants,” “stores” and “units” are used interchangeably.
This Form 10-K should be read in conjunction with the Forward-Looking Statements on page 2 and the Risk Factors set
forth in Item 1A.
(a) General Development of Business
In January 1997, PepsiCo announced its decision to spin-off its restaurant businesses to shareholders as an independent
public company (the “Spin-off”). Effective October 6, 1997, PepsiCo disposed of its restaurant businesses by distributing
all of the outstanding shares of Common Stock of YUM to its shareholders.
On May 7, 2002, YUM completed the acquisition of Yorkshire Global Restaurants, Inc. (“YGR”), the parent company
and operator of Long John Silver’s (“LJS”) and A&W All-American Food Restaurants (“A&W”). On May 16, 2002,
following receipt of shareholder approval, the Company changed its name from TRICON Global Restaurants, Inc. to
YUM! Brands, Inc.
(b) Financial Information about Operating Segments
YUM consists of six operating segments: KFC-U.S., Pizza Hut-U.S., Taco Bell-U.S., LJS/A&W-U.S., YUM Restaurants
International (“YRI” or “International Division”) and YUM Restaurants China (“China Division”). For financial
reporting purposes, management considers the four U.S. operating segments to be similar and, therefore, has aggregated
them into a single reportable operating segment. The China Division includes mainland China (“China”), Thailand and
KFC Taiwan, and the International Division includes the remainder of our international operations.
Operating segment information for the years ended December 27, 2008, December 29, 2007 and December 30, 2006 for
the Company is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) in Part II, Item 7, pages 24 through 52 and in the related Consolidated Financial Statements and footnotes in
Part II, Item 8, pages 53 through 106.
(c) Narrative Description of Business
General
YUM is the world’s largest quick service restaurant (“QSR”) company based on number of system units, with more than
36,000 units in more than 110 countries and territories. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and
A&W (the “Concepts”), the Company develops, operates, franchises and licenses a worldwide system of restaurants
which prepare, package and sell a menu of competitively priced food items. The Company either operates units or they
are operated by independent franchisees or licensees under the terms of franchise or license agreements. Franchisees can
range in size from individuals owning just one unit to large publicly traded companies. In addition, the Company owns
non-controlling interests in Unconsolidated Affiliates in China who operate similar to franchisees.
Form 10-K