Pizza Hut 2010 Annual Report Download - page 126

Download and view the complete annual report

Please find page 126 of the 2010 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.

Page out of 236

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236

29
Results of Operations
Amount
% B/(W)
2010 2009
2008 2010 2009
Company sales
$
9,783
$
9,413
$
9,843 4(4
)
Franchise and license fees and income 1,560 1,423 1,461 10 (3
)
Total revenues
$
11,343
$
10,836
$
11,304 5(4
)
Company restaurant profit
$
1,663
$
1,479
$
1,378 12 7
% of Company sales 17.0% 15.7% 14.0% 1.3 ppts. 1.7 ppts.
Operating Profit
$
1,769
$
1,590
$
1,517 11 5
Interest expense, net 175 194 226 914
Income tax provision 416 313 319 (33) 2
N
et Income – including noncontrolling interest 1,178 1,083 972 9 11
N
et Income – noncontrolling interest 20 12 8(60
)
(51
)
N
et Income – YUM! Brands, Inc.
$
1,158
$
1,071
$
964 811
Diluted EPS(a)
$
2.38
$
2.22
$
1.96 713
Diluted EPS before Special Items(a)
$
2.53
$
2.17
$
1.91 17 13
Effective tax rate 26.1% 22.4% 24.7%
(a) See Note 3 for the number of shares used in these calculations.
Significant Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or
Future Results
Special Items
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) above
and throughout this document, the Company has provided non-GAAP measurements which present operating results in
2010, 2009 and 2008 on a basis before Special Items. Included in Special Items are the impact of measures we took to
transform our U.S. business (“the U.S. business transformation measures”) including: the U.S. refranchising gain (loss),
the depreciation reduction arising from the impairment of KFC restaurants we offered to sell in 2010, charges relating to
U.S. G&A productivity initiatives and realignment of resources, investments in our U.S. Brands and a 2009 U.S.
Goodwill impairment charge. Special items also include losses recognized in 2010 and 2009 as a result of our decision to
refranchise our equity markets in Mexico and Taiwan, the 2009 gain upon our acquisition of additional ownership in, and
consolidation of, the operating entity that owns the KFCs in Shanghai, China, and the 2008 gain on the sale of our
minority interest in our Japan unconsolidated affiliate. These amounts are further described below.
Form 10-K