Pizza Hut 2009 Annual Report Download - page 114

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Fiscal years 2009, 2008, 2007 and 2006 include 52 weeks and fiscal year 2005 includes 53 weeks.
The selected financial data should be read in conjunction with the Consolidated Financial Statements and the Notes
thereto.
(a) Fiscal year 2009 included non-cash charges of $26 million and $12 million to write-off goodwill related to our
LJS/A&W U.S. and Pizza Hut South Korea businesses, respectively. See Note 5 to the Consolidated Financial
Statements for a description of our store closures, store impairment expenses and Refranchising Gain (Loss) in
2009, 2008 and 2007. Additionally, see Note 10 describing our goodwill impairment expense recognized in
2009.
(b) Fiscal year 2009 included a gain of $68 million related to the consolidation of a former unconsolidated affiliate
in China, a loss of $40 million related to U.S. business transformation measures, including the $26 million
goodwill charge described in (a), and a loss of $10 million as a result of our decision to offer to refranchise an
equity market outside the U.S. Fiscal year 2008 included a gain of $100 million related to the sale of our interest
in our unconsolidated affiliate in Japan and a loss of $61 million related to U.S. business transformation
measures. These items are discussed further within our MD&A. Fiscal year 2005 included gains of $2 million
for recoveries related to both the Wrench litigation and Ameriserve bankruptcy.
(c) Adjusted for the two for one stock split on June 26, 2007. See Note 3 to the Consolidated Financial Statements.
(d) In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)
throughout this document, the Company has provided non-GAAP measurements which present operating results
on a basis before Special Items. The Company uses earnings before Special Items as a key performance measure
of results of operations for the purpose of evaluating performance internally. This non-GAAP measurement is
not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company
believes that the presentation of earnings before Special Items provides additional information to investors to
facilitate the comparison of past and present operations, excluding items that the Company does not believe are
indicative of our ongoing operations due to their size and/or nature. The gains and charges described in (b),
above, are considered Special Items. The 2009 and 2008 Special Items are discussed in further detail within the
MD&A.
(e) System sales growth includes the results of all restaurants regardless of ownership, including Company owned,
franchise, 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 restaurant sales are not included in Company sales we present on
the Consolidated Statements of Income; however, the 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 our revenue drivers, Company and franchise same store sales as well as net unit development.
Same store sales growth includes the results of all restaurants that have been open one year or more.
(f) Local currency represents the percentage change excluding the impact of foreign currency translation. These
amounts are derived by translating current year results at prior year average exchange rates. We believe the
elimination of the foreign currency translation impact provides better year-to-year comparability without the
distortion of foreign currency fluctuations.
Form 10-K