Pizza Hut 2011 Annual Report Download - page 124

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Fiscal year 2011 includes 53 weeks and fiscal years 2010, 2009, 2008 and 2007 include 52 weeks. See Management's Discussion
and Analysis of Financial Condition and Results of Operations ("MD&A") for discussion of the impact of the 53rd week in fiscal
year 2011.
The selected financial data should be read in conjunction with the Consolidated Financial Statements.
(a) See Note 4 for discussion of Refranchising and Store Closure and Impairment Activity.
(b) Fiscal years 2011, 2010 and 2009 include the impact of Special Items described in further detail within our MD&A.
Fiscal year 2009 also included a non-cash charge of $12 million to write-off goodwill related to our Pizza Hut Korea
business. Fiscal year 2008 also included a pre-tax gain of $100 million related to the sale of our interest in our
unconsolidated affiliate in Japan.
(c) 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 2011, 2010 and 2009 Special Items are discussed in further detail within the MD&A.
(d) Franchisee and System units at 2011 reflect the LJS and A&W divestitures. See Restaurant Unit Activity within our
MD&A for further detail.
(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 on the Consolidated Statements of Income;
however, the franchise and license 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 estimated
growth in sales 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