Search for a Company by Name
Home > Pizza Hut Annual Reports > 2012 Annual Report

Pizza Hut 2012 Annual Report Download

Download and view the complete 2012 Pizza Hut annual report

Please find the complete 2012 Pizza Hut annual report annual report below. You can navigate through the pages in the report by either clicking one the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Table of contents

  • Page 1
    Staying the Course China and a Whole Lot More 2012 Yum! Brands Annual Customer Mania Report
  • Page 2
    ...In millions, except for per share amounts) Year-end 2012 2011 % B/(W) change Company sales Total revenues Operating Profit Net Income -......7-8 Driving Long-Term Shareholder Value...9 Company with a Huge Heart...10 ABOUT THE PAPER USED FOR THIS REPORT The inks used in the...
  • Page 3
    ... Return on Invested Capital of 22%. Our strong cash flow generation allowed us to increase our dividend rate 18%, to an annual rate of $1.34 per share. Our share price increased 13% for the full year, on top of 20% in 2011. Looking back, we ...
  • Page 4
    ... and we continue to make progress leveraging these assets further by building sales layers and expanding dayparts. Additionally, we invested over ... adds up to a growing confidence in our business model. restaurants around the world. Over 39,000 Building sales layers and expanding day parts. As a ...
  • Page 5
    1 Build leading brands in China in every significant category. and Pizza Hut are developing rapidly across China in cities large and small, including...increase its penetration levels in existing markets. At 826 units, Pizza Hut Casual Dining is the leader in its category. Both KFC...
  • Page 6
    ... remember, I'm only talking about KFC. Pizza Hut Casual Dining, with its dramatic sales increase and strong ... Dining. We will also continue to invest behind Pizza Hut Home Service, Little Sheep and... 2013. Pizza Hut Casual Dining restaurants in China. 826 China is the #1 retail growth opportunity in...
  • Page 7
    ... we have built more than 100 new units, and we expect that number to grow as we build even more capability in India. Our ..., affordable and In addition to the unprecedented opportunity in China, we have tremendous growth opportunity around the world. Consider this, we only have...
  • Page 8
    innovative experiences with KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and Taco Bell.... years, Russia has had the highest same-store sales growth out of our 20 business ... term. At the same time, we are very optimistic about the new unit opportunities and sales growth we ...
  • Page 9
    ... building each of our brands. Operating profit grew 13%, and same-store sales increased 5% for the year, including growth of 8% at Taco Bell, 3% at Pizza Hut and 3% at KFC. Taco Bell earned its place in QSR and social media history with the "...
  • Page 10
    ...pizza innovation and everyday $10 large pizza offers. Given its sales and unit margin success, Pizza Hut stepped up new unit development on ...past 4 years of negative same-store sales growth. go from about 5,000 to 8,000 units and Pizza Hut to expand from over 6,000 to 8,000 ...
  • Page 11
    ... industry-leading, long-term shareholder and franchisee value. penetrated markets like Pizza Hut UK and increasing our exposure in emerging and under-penetrated... highgrowth emerging market that has over 100 KFC and Pizza Hut restaurants. Our success executing our strategies has...
  • Page 12
    ...and will do to live up to that. After reading this Annual Report, I hope you'll agree our plan to STAY THE COURSE is great news ... I want to thank all our team members, restaurant general managers, franchisees, community partners and restaurant support leaders who are giving their all to win customers...
  • Page 13
    ... back the vision defining global company that feeds the world famous recognition culture where everyone ... Customer Mania come alive for every customer in every restaurant Build dynasties in every country Always connect with customers, always reach, always lead a company with a huge heart Open...
  • Page 14
    dynasty growth model our future back vision our goal Be the Defining Global Company That Feeds the World. Be the Best in the World at Building Great Restaurant Brands! our passion Customer Mania...put a YUM on customers' faces around the world our ...
  • Page 15
    ... important and we encourage you to vote promptly. You may vote your shares via a toll-free telephone number or over the Internet...Held on May 15, 2013-this Notice and the proxy statement are available at www.yum.com/investors/investor_materials. asp. The Annual Report on Form 10-K is available at www....
  • Page 16
  • Page 17
    ...You can vote if you were a shareholder of record as of the close of business on March 18, 2013. ANNUAL REPORT: A copy of our 2012 Annual Report on Form 10-K is included with this proxy statement. WEBSITE: You may also read the Company's Annual Report and this...
  • Page 18
    ...Proxy Card)...21 Shareholder Proposal Regarding Packaging Recycling (Item 5 on the Proxy Card) ...25 STOCK OWNERSHIP ...27 29 30 Compensation Discussion and Analysis ...30 Management Planning and Development Committee Report...-End ...48 Option Exercises and Stock Vested...50 Pension Benefits ...51 ...
  • Page 19
    ... PROXY STATEMENT For Annual Meeting of Shareholders To Be Held On May 15, 2013 The Board of Directors ... Annual Meeting, shareholders will vote on several important Company matters. In addition, our management ... our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting....
  • Page 20
    ...AN ADMISSION TICKET OR PROOF THAT YOU OWN YUM COMMON STOCK, YOU MAY NOT BE ADMITTED INTO THE ANNUAL MEETING. Please note ...up questions will be permitted. Who may vote? You may vote if you owned YUM common stock as of the close of business on the record date, March 18, 2013. Each share of YUM common ...
  • Page 21
    ... Direct Stock Purchase Plan, the administrator of this program, as the shareholder of record, may only vote the shares for... May 14, 2013. Proxy Statement Can I vote at the Annual Meeting? Shares registered directly ...you the right to vote the shares. Even if you plan to attend the Annual Meeting, we ...
  • Page 22
    ... firms have the authority under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on... In order for us to conduct our Annual Meeting, a majority of the outstanding shares of YUM common stock, as of March 18, 2013, ...
  • Page 23
    ... Annual Meeting. What if other matters are presented for consideration at the Annual Meeting? As of the date of this proxy statement, our management knows of no matters that will be presented for consideration at the Annual Meeting other than those matters discussed in...
  • Page 24
    GOVERNANCE OF THE COMPANY The business and affairs of YUM are managed under the direction of the Board of Directors. The Board believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board's ...
  • Page 25
    ... Annual Meeting and 8 of the Company's 11 then directors attended the 2012 Annual Meeting. How does ... that the Company presents its message and strategy to shareholders, employees, customers, franchisees and business ... a new position of lead director, after YUM! BRANDS, INC. - 2013 Proxy Statement ...
  • Page 26
    ... with sufficient authority to ensure independent oversight of the Company and its management. The lead director position has no term limit and is subject ... to ensure independent oversight of the Company and its management. The lead director position has no term limit and is ...
  • Page 27
    ... Audit Committee and our Chief Financial Officer. The Audit Committee also receives reports at each meeting regarding ...-term incentives and require executives to personally invest in Company stock. In 2013, the Management Planning and Development Committee of the Board of Directors oversaw the ...
  • Page 28
    ... and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and... addition to our policy on communicating with our non-management directors. Any person, whether or not an employee, who has a concern about the conduct of the Company or any ...
  • Page 29
    ... time the adequacy of the Company's Corporate Governance Principles • Receives comments from all directors and reports annually to the ... Walter • Exercises all of the powers of the Board in the management of the business and affairs of the Company consistent with applicable law while the ...
  • Page 30
    ... of Directors expects non-management directors to hold a meaningful number of shares of Company common stock and expects non-management ... interests of directors with those of our shareholders. How much YUM stock do the directors own? Stock ownership information for each director nominee is shown in ...
  • Page 31
    ... for election this year to hold office until the 2014 Annual Meeting and until their respective successors are elected and ... the nominees below contains information regarding the person's service as a director, business experience, director positions held currently or at any time during the last ...
  • Page 32
    ...Co.'s Treasury & Securities Services business, one of the world's largest cash management providers and...: • Operating and management experience, including as chairman of international sales and distribution business... 2006 to May 2008, he was Senior Advisor and Managing Director to Warburg Pincus...
  • Page 33
    ... president and chief executive officer of global travel-related services company • Expertise in finance, marketing and international business development • Public company directorship and committee experience • Independent of...
  • Page 34
    ... Officer, KFC and Pizza Hut from August 1996 to July 1997, at which time he became acting ... Division. Prior to this position, he was the Vice President of North Asia for both KFC and Pizza Hut. Specific qualifications, experience, skills and expertise: • Operating and management ...
  • Page 35
    ... nominated by the Board of Directors. What vote is required to elect directors? A nominee will be elected as a director if the number of "FOR" votes exceeds the number of "AGAINST" votes. Our policy regarding the election of directors can be found in our Corporate ...
  • Page 36
    ... for professional services rendered by KPMG for the audit of the Company's annual financial statements for 2012 and..., and fees billed for audit-related services, tax services and all other... over financial reporting, statutory audits and services rendered in connection with the Company's securities...
  • Page 37
    ... and retain the talented leaders necessary for our Company to succeed in the highly competitive market for talent, while maximizing shareholder returns. This approach has made our management team a key driver in the Company's strong performance over both the long...
  • Page 38
    ... (from approximately 90% stock appreciation rights and 10% performance share plan units in 2012); • Eliminating CEO's Accruals under Company's Pension Equalization ... is advisory and non-binding on the Company, the Board of Directors and the Management Planning and Development Committee ...
  • Page 39
    ITEM 4 Re-Approval of YUM! Brands, Inc. Long Term Incentive Plan Performance ... does not seek to increase the number of shares of common stock that may be issued under ... otherwise be the responsibility of the Committee. The Management Planning and Development Committee of the Company's Board currently ...
  • Page 40
    ... stock under each option shall not be less than the closing price of a share of stock on the date the option is granted. The option ... Participant to receive the amount by which the fair market value of a specified number of shares on the exercise date exceeds an exercise price established by the ...
  • Page 41
    ...; market value added or economic value added; profits; return on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant unit development. Each goal may ...
  • Page 42
    ... is disabled, as that term is defined in the Internal Revenue Code). The excess of the fair market value of the stock at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the ...
  • Page 43
    ...and share ownership of the proponent upon request. Packaging Recycling WHEREAS discarded food service ... should include aggressive recycling goals for all food service packaging as feasible and .... SUPPORTING STATEMENT We believe the requested report is in the best interest of YUM! and its shareholders...
  • Page 44
    ... PACKAGING RECYCLING Management Statement in Opposition to Shareholder Proposal What is the Company's position regarding this proposal? The Board of Directors recommends that ... food packaging and including greater recycled content: • Pizza Hut U.S.'s, packaging includes 95% fiber sourced ...
  • Page 45
    ... holds in excess of one percent of the outstanding YUM common stock. Directors and executive officers as a group beneficially own approximately 2%. Our ... position. The table shows the number of shares of common stock and common stock equivalents beneficially owned as of ...
  • Page 46
    ... options and SARs awarded under our employee or director incentive compensation plans. For stock options, we report shares equal to the ...equivalents held in deferred compensation accounts which become payable in shares of YUM common stock at a time (a) other than at termination ...
  • Page 47
    ... of YUM common stock to file with the SEC reports of their ownership and changes in their ownership of YUM common stock. Directors, executive officers and greater-than-ten percent shareholders are also required to furnish YUM with copies of...
  • Page 48
    ... as our total shareholder return during the 2012 calendar year was 15%. Relationship Between Company Pay and Performance Our ... interests of our shareholders • Support our vision to be the Defining Global Company That Feeds the World • Pay for performance •...
  • Page 49
    ...-over-year EPS growth and the related increase in our stock price and Total Shareholder Return ("TSR") over the past ten years. ... basis and the initial impact of expensing stock options in 2005. The special items excluded are the same as those excluded in the Company's annual earnings releases. EPS ...
  • Page 50
    ... paid and annual long-term incentive award value has remained relatively ï¬,at from 2009-2012. Since the beginning of 2008, the cumulative total shareholder return for our investors was ... 5 000 0 2008(2) 2009 2010 2011 2012 (1) Represents our CEO's base salary, stock options/...
  • Page 51
    ...bonus and will receive an annual interest allocation on his account balance equal to 120% of the applicable federal rate. (See footnote ... Executive Officers and other executives to personally invest in Company stock Key Elements of Our Executive Compensation Program • Pay for Performance -...
  • Page 52
    ... change in control • No hedging or pledging of Company stock • No inclusion of the value of equity awards in pension calculations • No tax gross-ups • ...-2012 ALL OTHER NAMED EXECUTIVE OFFICERS TARGET PAY MIX-2012 21% Proxy Statement 13% 21% 58% 21% ...
  • Page 53
    ... and Development Committee or management • Meridian's partners and employees who provide services to the Committee are prohibited from owning YUM ... often correlates with the market value of compensation for senior executive positions. For companies with significant franchise operations, ...
  • Page 54
    ... than target bonus when benchmarking pay opportunities with the Executive Peer Group. • Determination of Stock ... an annual interest allocation on his account balance equal to 120% of the applicable federal rate. ... potential and market value. Specific salary increases take into account these ...
  • Page 55
    ... 2012 based on recommendations from management. The objectives were also reviewed by the Board to ensure the goals support the Company's overall ... at least 10% for over 10 years to optimize the long term and short term perspective on managing the business and believes this consistent year after year ...
  • Page 56
    ...48 50% 24 System Sales Growth 15% 20% 200 20% 40 System Gross New Builds 550 889 200 20% 40 System Customer Satisfaction 100 165 165 10...adjusted for the impact of certain non-recurring costs within our Pizza Hut U.K. market. (3) Actual system sales growth was adjusted for the impact ...
  • Page 57
    ... factor. This determination was based upon his leadership of the Taco Bell, Pizza Hut and KFC US Divisions and Yum! Restaurants International Division along with .... Each SAR and stock option was granted with an exercise price based on the closing market price of the underlying YUM common ...
  • Page 58
    ...-year EPS compound annual growth rate as set forth in the chart below: EPS Growth Payout as % of Target
  • Page 59
    ... cap placed on the broad-based employee plan. Effective January 1, 2013, the Company no longer ... retirement from the Company, Mr. Su will be required to reimburse the Company for the tax reimbursements for certain stock .... (2) Based on YUM closing stock price of $66.40 as of December 31, 2012. (3) Mr....
  • Page 60
    ...stock option and stock appreciation rights grants annually at the Committee's January meeting. This meeting... approximately 17,000 options or stock appreciation rights annually. In the case of these grants... the terms of each award, except the actual number of stock appreciation rights or options, which...
  • Page 61
    ...law. Hedging and Pledging of Company Stock Under our Code of Conduct, no employee or director is permitted to ... themselves from, or profit from, a decline in the Company stock price. Similarly, no employee or director may enter into hedging transactions in the Company's stock. Such transactions ...
  • Page 62
    ... are our Chief Executive Officer, Chief Financial Officer and our three other most ... with SEC rules. Summary Compensation Table Change in Pension Value and Nonqualified Deferred All ... 1,474,038 - 2010 1,400,000 - 2012 500,308 Stock Awards ($)(2) (d) 773,022 773,024 740,005 Non-Equity ...
  • Page 63
    ... Statements and Supplementary Data" of the 2012 Annual Report in Notes to Consolidated Financial Statements at Note 15, "Share-based and Deferred Compensation Plans...). Going forward, he will receive a market rate of interest on his pension account plus an annual benefit allocation equal ...
  • Page 64
    ...fees, "dead head" costs of flying planes to and from locations for personal use, and contract labor; for Mr. Su: ...the Company-provided tax reimbursement for China income taxes incurred on deferred income distributions and stock option exercises which exceed the marginal Hong Kong tax rate. (3) These ...
  • Page 65
    ...statement. If the 10% growth target is achieved, 100% of the PSUs will pay out in shares of Company stock. If less than 7% ..."Financial Statements and Supplementary Data" of the 2012 Annual Report in Notes to Consolidated Financial Statements at Note 15, "Share-based and Deferred Compensation Plans." ...
  • Page 66
    ...at Fiscal Year-End The following table shows the number of shares covered by exercisable and unexercisable stock options, SARs, and unvested RSUs and ... Equity incentive Market plan awards: plan awards: Number Value of market or Number of of Shares payout value unearned or Units Shares or Units of of ...
  • Page 67
    ... Market plan awards: plan awards: Number Value of market or Number of of Shares payout value unearned or Units ...) that vests after five years. (3) The market value of these awards are calculated by multiplying the number of shares covered by the award by $66.40, the closing price of YUM stock on the ...
  • Page 68
    ... including accumulated dividends and before payment of applicable withholding taxes and broker commissions. Option Awards Stock Awards Value Number of Value Number of realized on Shares Acquired Realized on Shares Acquired Vesting on Exercise ...
  • Page 69
    ... the YUM! Brands Retirement Plan ("Retirement Plan") 2012 FISCAL YEAR PENSION BENEFITS TABLE Number of Years of ... consistent with those used in the Company's financial statements. Proxy Statement (1) YUM! Brands Retirement Plan The Retirement Plan and the Pension Equalization Plan (discussed ...
  • Page 70
    ...¬ts financed by the Company Any other Company financed benefits that are attributable to periods of pensionable service and that are derived from a plan maintained or contributed to by the Company or one or more of the group of ...
  • Page 71
    ... Program are designed to match the performance of actual investments; that is, they provide market rate returns and do not provide for...the annual incentive are allocated, which is the same day we make our annual stock appreciation right grants. Amounts attributable to the matching contribution under ...
  • Page 72
    ... EID Program earnings are market based returns and, therefore, are not reported in the Summary Compensation Table... LRP. For above market earnings on nonqualified deferred compensation, see the "Change in Pension Value and ... amounts distributed to pay payroll taxes due upon their account balance under ...
  • Page 73
    ...¬cer's compensation and service levels as of such date and, if applicable, based on the Company's closing stock price on that date. These benefits are in ... affect these amounts include the timing during the year of any such event, the Company's stock price and the executive's ...
  • Page 74
    ... Novak, Grismer, Su, Carucci and Pant would have received Company-paid life insurance of $3,360,000; $1,100,000; $2,365,...be entitled to receive the following: Proxy Statement • a proportionate annual incentive assuming achievement of target performance goals under the bonus plan or, if higher, ...
  • Page 75
    ...410,000 $ 4,932,000 $ 3,720,076 Annual Incentive 4,584,320 760,760 ...846,785 1,620,000 Accelerated Vesting of Stock Options and SARs 22,865.... Effective March 15, 2013, the Company eliminated excise tax gross-ups and implemented a best net after-tax method. See the Company's Compensation Discussion and...
  • Page 76
    ... (c) represent the grant date fair value for annual stock retainer awards granted to directors in 2012. (2) Amounts in column (d) represent the... Annual Compensation. Each director who is not an employee of YUM receives an annual stock grant retainer with a fair market value of $170,000 and an annual ...
  • Page 77
    ... Walter in 2012) receives an additional $15,000 stock retainer annually. Initial Stock Grant upon Joining Board. Non-employee directors also receive a one-time stock grant with a fair market value of $25,000 on the date of grant upon...
  • Page 78
    .... The SharePower Plan is administered by the Management Planning and Development Committee of the Board of Directors. The exercise price of a stock option or SAR... the RGM Plan is (i) to give restaurant general managers ("RGMs") the opportunity to become owners of stock, (ii) to align the interests of...
  • Page 79
    ... was amended and restated effective November 16, 2012. The charter is reviewed by management at least annually, and any recommended changes are presented to the Audit Committee for ... effectiveness of internal control over financial reporting. YUM! BRANDS, INC. - 2013 Proxy Statement 61
  • Page 80
    ... independent auditors all annual and quarterly financial statements prior to their issuance. During 2012, management advised the ... the Committee recommended to the Board of Directors that it include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for ...
  • Page 81
    ... receive future annual reports and proxy statements from us and to vote their shares ....amstock.com, click on Shareholder Account Access, log in and locate the option to receive Company mailing ..., if applicable, this proxy statement and Annual Report, to multiple shareholders sharing an address unless ...
  • Page 82
    ... follow to nominate persons for election as directors or to introduce an item of business at an Annual Meeting of Shareholders that is not included in our ... statement. These procedures provide that nominations for director nominees and/or an item of business to be introduced at an Annual Meeting of ...
  • Page 83
    ...or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (b) an Exercise Price established by ...the composite tape for securities listed on the New York Stock Exchange (or if no sales of stock were made on...
  • Page 84
    ... later granted Award may be less than the Fair Market Value of the Stock at the time of such grant; provided, however, that an exercise price below the ...on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or...
  • Page 85
    ... of determining the maximum number of shares of Stock available for delivery under the Plan. If the exercise price of any stock option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number of ...
  • Page 86
    ... the Participant, through the surrender of shares of Stock which the Participant already owns, or through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan. Subsections 4.5, 4.6 and 4.7 shall be ...
  • Page 87
    ... business combinations may provide for exercise prices that are less than the Fair Market Value of the Stock at the time of the replacement grants, if the Committee determines that ... pay any benefits to any person. Proxy Statement YUM! BRANDS, INC. - 2013 Proxy Statement A-5
  • Page 88
    ... Performance Shares (including any Award payable in Stock which is granted in conjunction with a Company.... Proxy Statement Section 6 Committee 6.1 Administration. The authority to control and manage the operation and... and any decision made by it under the Plan is final and binding on all persons...
  • Page 89
    ... discharge its duties. The records of the Company and Subsidiaries as to an employee's or Participant's employment (or other provision of services), termination of employment ...Board; (ii) no amendments may increase the limitations on the number of shares set forth in subsections 4.2(b) and 4.2(e) or ...
  • Page 90
    ... become vested prior to the date the employee first performs such services. Fair Market Value. For purposes of determining the "Fair Market Value" of a share of Stock as of any date, Fair Market Value shall mean the average between ...
  • Page 91
    ... 409A, options and SARs shall not be granted to employees or directors of Subsidiaries unless the ownership of the Subsidiary satisfies Treas. Reg. §1.409A-1(b)(5)(iii). (i) Stock. The term "Stock" shall mean shares of common stock of the Company. Proxy Statement YUM! BRANDS, INC. - ...
  • Page 92
    ... par value Name of Each Exchange on Which Registered New York Stock Exchange... Act). The aggregate market value of the voting stock (which consists solely of shares of Common ..., to be "affiliates" of the registrant. The number of shares outstanding of the registrant's Common Stock as of February 12...
  • Page 93
    ...Financial Data ...14 Management's Discussion and Analysis of Financial Condition and Results of Operations...15 Quantitative and Qualitative Disclosures About Market Risk ...35 Financial Statements and ...Fees and Services ...72 PART IV ITEM 15 73 Exhibits and Financial Statement Schedules...
  • Page 94
    ... I, Item 1A of this Form 10-K and (ii) the factors described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part ... future filings or communications regarding our business results. Form 10-K 2 YUM! BRANDS, INC. - 2012 Form 10-K
  • Page 95
    ... three concepts of KFC, Pizza Hut and Taco Bell (the "Concepts"), the Company develops, operates, franchises and ...700 system restaurants, primarily Company-owned KFCs and Pizza Huts. In 2012, the China Division recorded ... basis. Pizza Hut and, on a much more limited basis, KFC offer delivery service. ...
  • Page 96
    ... U.S. units, and 1 percent of the India units are Company-owned. • Pizza Hut operates in the delivery and casual dining segments around the world. Outside of the ... of year end 2012, Pizza Hut was the leader in the U.S. pizza QSR segment, with a 16 percent market share in that ...
  • Page 97
    ... U.S. Division The Company, along with the representatives of the Company's KFC, Pizza Hut and Taco Bell franchisee groups, are members in ...basis. Research and Development ("R&D") The Company operates R&D facilities in Shanghai, China (China Division); Plano, Texas (Pizza Hut U.S. and YRI); Irvine, ...
  • Page 98
    ...which the Company operates. The Company and its Concepts consider their employee relations to be good. (C) Financial ... Statements in Part II, Item 8, pages 36 through 70. (D) Available Information located ... our business. A significant and growing portion of our restaurants are located in China...
  • Page 99
    ... outside the U.S., especially China and other emerging markets. The successful development of new units will depend in large part on our ability...¬cant in the future as we increase our presence in existing markets. Form 10-K Our operating results are closely tied to the success of our Concepts' ...
  • Page 100
    ... the process of refranchising restaurants in the U.S., which has reduced and is expected to continue to reduce the percentage of Company ownership of KFCs, Pizza Huts, and Taco Bells in the U.S. Once executed, the success of the refranchising ...
  • Page 101
    ... to increase materially. We are subject to income taxes as well as non-income based taxes, such as payroll, sales, use, value-added, net worth, property, withholding and franchise taxes in both the U.S. and various foreign jurisdictions. We are ...
  • Page 102
    ... Hut U.S. and YRI corporate headquarters and a research facility in Plano, Texas are owned by Pizza Hut. Taco Bell leases its corporate headquarters and ... years and generally have renewal options; however, Pizza Hut delivery/ ITEM 3 Legal Proceedings condition or cash ...
  • Page 103
    .... Bergren served as President and Chief Concept Officer of Pizza Hut, a position he held beginning in November 2006. Mr. Bergren served ... Relations of YUM from September 2007 to June 2008; and Chief Financial Officer of Pizza Hut UK from May 2005 to September 2007. Muktesh Pant, 58, is Chief ...
  • Page 104
    ...low NYSE composite closing sale prices by quarter for the Company's Common Stock and dividends per common share. $ 2011 Quarter First Second ... share of Common Stock, one of which had a distribution date of February 3, 2012. The Company targets an annual dividend payout ratio ...
  • Page 105
    ...table provides information as of December 29, 2012 with respect to shares of Common Stock repurchased by the Company during the quarter then ended: Total number of shares ... our outstanding Common Stock. On November 16, 2012, our Board of Directors authorized additional share repurchases ...
  • Page 106
    ...DATA (in millions, except per share and unit amounts) Summary of Operations Revenues Company sales Franchise and license fees and... same store sales growth(c) Shares outstanding at year end Cash dividends declared per Common Stock Market price per share at year end $ 11,833 1,800 13,633 (37) 78 2,...
  • Page 107
    ... restaurants in more than 125 countries and territories operating primarily under the KFC, Pizza Hut or Taco Bell brands. In December of 2011 we ...are included in the Company's results for 2011 and 2010. The Company's primary restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders in...
  • Page 108
    ... and share repurchases. The Company has one of the highest returns on invested capital in the Quick Service Restaurants ("... developed the KFC and Pizza Hut brands into the leading quick service and casual ... testing the additional restaurant concepts of Pizza Hut Home Service (pizza delivery) and East ...
  • Page 109
    ...(a) REPORTED EFFECTIVE TAX RATE EFFECTIVE TAX RATE BEFORE SPECIAL ITEMS (a) See Note 3 for the number of shares used in these calculations. $ $... LJS and A&W brands. Other Special Items Income (Expense) includes the depreciation reductions from Pizza Hut UK and KFC U.S. restaurants impaired upon our ...
  • Page 110
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Year 2012 Detail of Special Items U.S. Refranchising gain (loss) YUM Retirement Plan settlement charge Gain upon acquisition of Little Sheep Losses associated with refranchising equity markets ...
  • Page 111
    ...the U.S. During the fourth quarter of 2012, we refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores allows the franchisee to pay continuing ...
  • Page 112
    ... which we choose to continue investing capital. In the U.S., we are targeting Company ownership of KFC, Pizza Hut and Taco Bell restaurants of about 10%, .... Additionally, in December 2012 we refranchised 331 remaining Company-owned dine-in restaurants in the Pizza Hut UK business and during 2010, we ...
  • Page 113
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes the impact of refranchising on Total revenues as described above: 2012 Decreased Company sales Increased Franchise and license fees and income DECREASE IN TOTAL ...
  • Page 114
    ...at end of 2011 New Builds Acquisitions(c) Refranchising Closures Other BALANCE AT END OF 2012 % of Total ... (435) (1) 14,500 100% China Balance at end of 2010 New Builds Refranchising Closures Balance at end of 2011 New Builds Acquisitions(c) Refranchising Closures BALANCE AT END OF 2012 % of Total ...
  • Page 115
    ...and Analysis of Financial Condition and Results of Operations U.S. Balance at end of 2010 New Builds ... at end of 2011 New Builds Acquisitions Closures BALANCE AT END OF 2012 % of Total Franchisees ...2011 represent the number of LJS and A&W units as of the beginning of 2011. Therefore, 2011 New Builds...
  • Page 116
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations System Sales Growth The following tables ... negative impact for Worldwide system sales for the year to date ended December 29, 2012. Company-Operated Store Results The following tables ...
  • Page 117
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations In 2012, the increase in China Company sales associated with store portfolio actions was... profit were Company same-store sales growth of 4%, which was partially offset by wage rate inn..
  • Page 118
    ... driven by refranchising, new unit development and positive franchise same-store sales. YRI Franchise... increase was driven by new unit development and positive franchise same-store sales. YRI Franchise... increase was driven by refranchising, positive franchise same-store sales and new unit development,...
  • Page 119
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations The increase in YRI G&A expenses for 2011 was driven by increased investment in strategic growth markets, including the acquisition of our Russia business in 2010, partially offset by G&A ...
  • Page 120
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Profit Amount 2011 $ 908 673 ... was driven by higher restaurant operating costs, higher franchise and license expenses and same-store sales declines, partially offset by ...
  • Page 121
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Income Taxes The reconciliation of income taxes calculated at the U.S. federal tax statutory rate to our effective tax rate is set forth below: 2012 751 4 (165) (47) - 14 (20) 537 2011 580 2 (...
  • Page 122
    ...ows from the operations of our company stores and from our extensive franchise operations which require a limited YUM investment. Net...historically experienced. We currently have investment-grade ratings from Standard & Poor's Rating Services (BBB) and Moody's Investors Service (Baa3). While we do not...
  • Page 123
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Contractual Obligations In addition to any discretionary spending we may choose to make, our significant contractual obligations and payments as of December 29, 2012 included: Less than 1 ...
  • Page 124
    ... fair value determinations if such franchise agreement is determined to not be at prevailing market rates.... consistency in royalty rates as a percentage of sales is appropriate as the Company and franchisee share in the impact ... impairment was recorded. Form 10-K 32 YUM! BRANDS, INC. - 2012 Form 10...
  • Page 125
    ... Taco Bell U.S. and KFC U.S. operating segments and our Pizza Hut United Kingdom ("U.K.") business unit. Within our Taco Bell U.S. operating segment, 181 ...-of-year goodwill). Within our Pizza Hut U.K. business unit, 359 dine-in and delivery restaurants were refranchised (...
  • Page 126
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations ... assessment of current market conditions. Our expected long-term rate of return on U.S. plan assets,... this rate is appropriate given the composition of our plan assets and historical market returns ...
  • Page 127
    ... in place to monitor and control their use. Interest Rate Risk We have a market risk exposure to changes in interest ... billion as of December 29, 2012. Operating in international markets exposes the Company to movements in foreign currency exchange rates. The Company's primary exposures result from ...
  • Page 128
    ...Page Reference Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Consolidated ...25, 2010 Notes to Consolidated Financial Statements Management's Responsibility for Financial Statements 37 38... 41 42 43-70 70 Financial Statement Schedules No schedules are required...
  • Page 129
    ... Accounting Firm The Board of Directors and Shareholders YUM! Brands, Inc. We have ... statements, assessing the accounting principles used and significant estimates made by management, ... of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely ...
  • Page 130
    ...1,733 12,626 $ 2010 9,783 1,560 11,343 Revenues Company sales Franchise and license fees and income Total revenues Costs and Expenses,... SHARE DILUTED EARNINGS PER COMMON SHARE DIVIDENDS DECLARED PER COMMON SHARE See accompanying Notes to Consolidated Financial Statements. Form 10-K $ $ $ $ 3,874 ...
  • Page 131
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Comprehensive ... losses arising during the year on pension and post-retirement plans Tax (expense) benefit ...INC. See accompanying Notes to Consolidated Financial Statements. $ 2012 1,608 $ 2010 1,178 $ 27 ...
  • Page 132
    ...or less, net Repurchase shares of Common Stock Excess tax benefit from share-based compensation Employee... Common Stock Other, net NET CASH USED IN FINANCING ACTIVITIES EFFECT OF EXCHANGE RATES ON... accompanying Notes to Consolidated Financial Statements. Form 10-K $ 40 YUM! BRANDS, INC. - 2012 ...
  • Page 133
    ... deferred credits Total Liabilities Redeemable noncontrolling interest Shareholders' Equity Common Stock, no par value, 750 shares authorized; 451 shares and 460 shares issued in ... 18 2,052 (247) 1,823 93 1,916 8,834 YUM! BRANDS, INC. - 2012 Form 10-K 41
  • Page 134
    ... (net of tax impact of $1 million) Comprehensive Income Dividends declared Repurchase of shares of Common Stock Employee stock option and SARs exercises (includes tax impact ...declared Repurchase of shares of Common Stock Employee stock option and SARs exercises (includes tax impact...
  • Page 135
    ... Inc. and Subsidiaries (collectively referred to herein as "YUM" or the "Company") comprises primarily the worldwide operations of KFC, Pizza Hut and Taco Bell (collectively the "Concepts"). YUM is the world's largest quick service restaurant company ...
  • Page 136
    ... previously reported Net Income - YUM! Brands, Inc. Franchise and License Operations. We execute franchise or ... Revenue Recognition. Revenues from Company-owned restaurants are recognized when payment is tendered at the time of sale. The Company presents sales net of sales-related taxes. Income from ...
  • Page 137
    ... options and stock appreciation rights ("SARs"), in the Consolidated Financial Statements as compensation cost over the service period based on their fair value on the ... would make such as sales growth and margin improvement. The discount rate used in the fair value calculation is ...
  • Page 138
    ... and liabilities are measured using enacted tax rates expected to apply to taxable income ... an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants.... that are held for sale. Leases and Leasehold Improvements. The Company leases land, buildings or both...
  • Page 139
    ... is generally estimated using discounted expected future after-tax cash ï¬,ows from Company operations and franchise royalties. The discount rate is ...includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can ...
  • Page 140
    ..., management of credit risk inherent in derivative instruments and fair value information. Common Stock Share Repurchases. From time to time, we ... as a reduction in retained earnings. Due to the large number of share repurchases and the increase in the market value of our stock over the past several ...
  • Page 141
    ... they are indicative of our ongoing operations. In 2012, System sales and Franchise and license ... would require us to purchase their remaining shares owned upon exercise, which may ..., we have reported the results of operations for the entity in the appropriate line items of our Consolidated Statement ...
  • Page 142
    ... - 63 During the fourth quarter of 2012, we refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores allows the franchisee to pay continuing ...
  • Page 143
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes the 2012 and 2011 activity related to reserves for remaining lease obligations for closed stores. Estimate/ Decision Changes 3 2 2012 Activity 2011 Activity $ $ Beginning ...
  • Page 144
    PART II ITEM 8 Financial Statements and Supplementary Data Property, Plant and Equipment Land Buildings and improvements Capital leases, primarily buildings Machinery and equipment Property, Plant and equipment, gross Accumulated depreciation and amortization PROPERTY, PLANT AND ...
  • Page 145
    PART II ITEM 8 Financial Statements and Supplementary Data Intangible assets, net for the years ended 2012 and 2011 are as ... were no borrowings outstanding under the Credit Facility at December 29, 2012. The interest rate for most borrowings under the Credit Facility ranges from 1.00% ...
  • Page 146
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes all Senior Unsecured Notes issued that remain ... executory costs, which include property taxes, maintenance and insurance. At December 29, 2012 we operated nearly 7,600 restaurants, leasing the ...
  • Page 147
    ... to certain market risks relating to its ongoing business operations. The primary market risks managed by using derivative instruments are interest rate risk and cash ï¬,ow volatility arising from foreign currency ï¬,uctuations. We ...
  • Page 148
    ... not a restaurant or restaurant group would be refranchised. 2012 Pizza Hut UK refranchising impairment (Level 3)(a) $ Little ... based on market rates. (a) See Note 4 for further discussions of Refranchising (gain) loss, including the Pizza Hut UK dine-in refranchising and the acquisition of Little ...
  • Page 149
    ... recognized in Accumulated Other Comprehensive Income: 2011 - (14) (369) (383) $ Form 10-K $ Actuarial net loss Prior service cost $ $ U.S. Pension Plans 2012 421 $ 7 428 $ 2011 540 3 543 $ $ International Pension Plans 2012 2011 14 $ 30 ...
  • Page 150
    PART II ITEM 8 Financial Statements and Supplementary Data Information for pension plans with an accumulated benefit obligation in excess of plan assets:...of plan assets, local laws and regulations. We do not plan to make any significant contributions to any pension plan outside...
  • Page 151
    ... make up 81% of total pension plan assets at the 2012 measurement date, are to reduce interest rate and market risk and to provide ... with obligations. A mutual fund held as an investment by the Plan includes shares of YUM common stock valued at $0.7 million at December 29, 2012 and $0.7 million at ...
  • Page 152
    ...than the average market price or the ending market price of the Company's stock on the date of grant. Potential awards to employees and non-employee directors under the LTIPs include stock options, incentive stock options, SARs, restricted stock, stock...
  • Page 153
    ... compensation to purchase phantom shares of our Common Stock and receive a 33% Company match ... includes the vesting period. Historically, the Company has repurchased shares on the open market in excess of the amount .... The fair values of RSU and PSU awards are based on the closing price of our stock ...
  • Page 154
    PART II ITEM 8 Financial Statements and Supplementary Data Impact on Net Income The components of share-based compensation expense and the...NOTE 16 Shareholders' Equity Under the authority of our Board of Directors, we repurchased shares of our Common Stock during 2012, 2011 and 2010. All amounts ...
  • Page 155
    PART II ITEM 8 Financial Statements and Supplementary Data The details of our income tax ... 26.1% Statutory rate differential attributable to foreign operations. This item includes local taxes, withholding ... rate differential attributable to foreign operations' line. In 2012, $14 million of net tax ...
  • Page 156
    PART II ITEM 8 Financial Statements and Supplementary Data The details of 2012 and 2011 deferred tax assets (liabilities) are set forth ...167) (121) (48) (336) 600 Operating losses and tax credit carryforwards Employee benefits Share-based compensation Self-insured casualty claims ...
  • Page 157
    ... Revenues 2011 5,566 $ 3,192 3,786 82 12,626 $ We are principally engaged in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco Bell concepts. KFC, Pizza Hut and Taco Bell operate in 120, 97, and 27...
  • Page 158
    PART II ITEM 8 Financial Statements and Supplementary Data China(b) YRI U.S. India Unallocated Occupancy and other(a)(c) Unallocated and corporate ..., net INCOME BEFORE INCOME TAXES Operating Profit; Interest Expense, Net; and Income Before Income Taxes 2012 2011 2010 $ 1,015 $ 908...
  • Page 159
    PART II ITEM 8 Financial Statements and Supplementary Data China YRI U.S. India Corporate $ $ Long-Lived Assets(j) ..., $10 million and $9 million, respectively. 2012 and 2011 include depreciation reductions arising from the impairment of Pizza Hut UK restaurants we decided to sell in 2011 of $13 ...
  • Page 160
    ...-wide class of hourly employees. On May 19, 2009 the court granted Taco Bell's... of people who use wheelchairs or scooters for mobility by failing to make its approximately 200 Company-owned ... in China. The shareholder plaintiff did not first submit a demand on the board of directors of the Company...
  • Page 161
    ... Colorado. The complaint alleged that Pizza Hut did not properly reimburse its delivery drivers for various ... class of current and former Pizza Hut, Inc. delivery drivers. However, on March 11... opt-ins. The final number has yet to be determined but is expected to be approximately 6,000. Pizza Hut ...
  • Page 162
    ...acquisition of Little Sheep of $74 million in the first quarter, refranchising losses associated with the Pizza Hut UK dine-in business of $24 million and $46 ..., respectively and a refranchising loss associated with the Pizza Hut UK dine-in business of $76 million in the third quarter. ...
  • Page 163
    ...LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and the ... quarter ended December 29, 2012. ITEM 9B Other Information None. YUM! BRANDS, INC. - 2012 Form 10-K 71
  • Page 164
    ... the Company's code of ethics and background of the directors appearing under the captions "Stock Ownership Information," "Governance of the Company," "Executive Compensation" and "Item 1: Election of Directors and Director biographies" is incorporated by...
  • Page 165
    ... (a) (1) (2) Financial Statements: Consolidated Financial Statements filed as part of this report are listed under Part II, Item 8 of this Form 10-K. Financial Statement Schedules: No schedules are required because either the required ...
  • Page 166
    ... of 1934, the registrant has duly caused this Form 10-K annual report to be signed on its behalf by the undersigned, ...) Vice President, Finance and Corporate Controller (principal accounting officer) Director Director Director Director Director Director Director Director Director Vice-Chairman of...
  • Page 167
    ...to YUM's Quarterly Report on Form 10-Q for quarter ended March 24, 2012. YUM Director Deferred... herein by reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended ... Definitive Proxy Statement on Form DEF 14A for the Annual Meeting of Shareholders held on May 21...
  • Page 168
    ...the Unified FoodService Purchasing Co-op, LLC, as filed herewith. YUM Restaurant General Manager Stock Option Plan, as effective April 1, 1999, and as ... for confidential treatment. Indicates a management contract or compensatory plan. 76 YUM! BRANDS, INC. - 2012 Form 10-K
  • Page 169
    ... a lost or stolen certificate • Retrieve a duplicate Form 1099-B • Purchase shares of YUM through the Company's Direct Stock Purchase Plan • Sell shares held by AST Access accounts online at the following URL: https://secure...
  • Page 170
    ...-0535 STOCK TRADING SYMBOL-YUM The New York Stock Exchange is the principal market for YUM Common Stock, ... INFORMATION Information about potential franchise opportunities is available at www.yumfranchises.com Yum! Brands' Annual Report contains many of the valuable trademarks owned and used by Yum! ...
  • Page 171
    ... Morgan Chase and Co.'s Corporate and Investment Bank Scott O. Bergren 66 Chief Executive Officer, Pizza Hut U.S. and Chief Innovation Officer, Yum! Brands,...Walter 67 Founder and Retired Chairman/CEO, Cardinal Health, Inc. Patrick Grismer 51 Chief Financial Officer, Yum! ...
  • Page 172
    Alone We're Delicious. Together We're Yum!® Yum! Brands, Inc., trades under the symbol YUM and is proud to meet the listing requirements of the NYSE, the world's leading equities market.


Type your new search above

The manual viewer requires the flash plugin to be installed and enabled.
To view this page ensure that Adobe Flash Player version 10 or greater is installed.

manual table of contents:

  • Pizza Hut 2012 Annual Report - Page 1
    Staying the Course China and a Whole Lot More 2012 Yum! Brands Annual Customer Mania Report
  • Pizza Hut 2012 Annual Report - Page 2
    ...In millions, except for per share amounts) Year-end 2012 2011 % B/(W) change Company sales Total revenues Operating Profit Net Income -......7-8 Driving Long-Term Shareholder Value...9 Company with a Huge Heart...10 ABOUT THE PAPER USED FOR THIS REPORT The inks used in the...
  • Pizza Hut 2012 Annual Report - Page 3
    ... Return on Invested Capital of 22%. Our strong cash flow generation allowed us to increase our dividend rate 18%, to an annual rate of $1.34 per share. Our share price increased 13% for the full year, on top of 20% in 2011. Looking back, we ...
  • Pizza Hut 2012 Annual Report - Page 4
    ... and we continue to make progress leveraging these assets further by building sales layers and expanding dayparts. Additionally, we invested over ... adds up to a growing confidence in our business model. restaurants around the world. Over 39,000 Building sales layers and expanding day parts. As a ...
  • Pizza Hut 2012 Annual Report - Page 5
    1 Build leading brands in China in every significant category. and Pizza Hut are developing rapidly across China in cities large and small, including...increase its penetration levels in existing markets. At 826 units, Pizza Hut Casual Dining is the leader in its category. Both KFC...
  • Pizza Hut 2012 Annual Report - Page 6
    ... remember, I'm only talking about KFC. Pizza Hut Casual Dining, with its dramatic sales increase and strong ... Dining. We will also continue to invest behind Pizza Hut Home Service, Little Sheep and... 2013. Pizza Hut Casual Dining restaurants in China. 826 China is the #1 retail growth opportunity in...
  • Pizza Hut 2012 Annual Report - Page 7
    ... we have built more than 100 new units, and we expect that number to grow as we build even more capability in India. Our ..., affordable and In addition to the unprecedented opportunity in China, we have tremendous growth opportunity around the world. Consider this, we only have...
  • Pizza Hut 2012 Annual Report - Page 8
    innovative experiences with KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and Taco Bell.... years, Russia has had the highest same-store sales growth out of our 20 business ... term. At the same time, we are very optimistic about the new unit opportunities and sales growth we ...
  • Pizza Hut 2012 Annual Report - Page 9
    ... building each of our brands. Operating profit grew 13%, and same-store sales increased 5% for the year, including growth of 8% at Taco Bell, 3% at Pizza Hut and 3% at KFC. Taco Bell earned its place in QSR and social media history with the "...
  • Pizza Hut 2012 Annual Report - Page 10
    ...pizza innovation and everyday $10 large pizza offers. Given its sales and unit margin success, Pizza Hut stepped up new unit development on ...past 4 years of negative same-store sales growth. go from about 5,000 to 8,000 units and Pizza Hut to expand from over 6,000 to 8,000 ...
  • Pizza Hut 2012 Annual Report - Page 11
    ... industry-leading, long-term shareholder and franchisee value. penetrated markets like Pizza Hut UK and increasing our exposure in emerging and under-penetrated... highgrowth emerging market that has over 100 KFC and Pizza Hut restaurants. Our success executing our strategies has...
  • Pizza Hut 2012 Annual Report - Page 12
    ...and will do to live up to that. After reading this Annual Report, I hope you'll agree our plan to STAY THE COURSE is great news ... I want to thank all our team members, restaurant general managers, franchisees, community partners and restaurant support leaders who are giving their all to win customers...
  • Pizza Hut 2012 Annual Report - Page 13
    ... back the vision defining global company that feeds the world famous recognition culture where everyone ... Customer Mania come alive for every customer in every restaurant Build dynasties in every country Always connect with customers, always reach, always lead a company with a huge heart Open...
  • Pizza Hut 2012 Annual Report - Page 14
    dynasty growth model our future back vision our goal Be the Defining Global Company That Feeds the World. Be the Best in the World at Building Great Restaurant Brands! our passion Customer Mania...put a YUM on customers' faces around the world our ...
  • Pizza Hut 2012 Annual Report - Page 15
    ... important and we encourage you to vote promptly. You may vote your shares via a toll-free telephone number or over the Internet...Held on May 15, 2013-this Notice and the proxy statement are available at www.yum.com/investors/investor_materials. asp. The Annual Report on Form 10-K is available at www....
  • Pizza Hut 2012 Annual Report - Page 16
  • Pizza Hut 2012 Annual Report - Page 17
    ...You can vote if you were a shareholder of record as of the close of business on March 18, 2013. ANNUAL REPORT: A copy of our 2012 Annual Report on Form 10-K is included with this proxy statement. WEBSITE: You may also read the Company's Annual Report and this...
  • Pizza Hut 2012 Annual Report - Page 18
    ...Proxy Card)...21 Shareholder Proposal Regarding Packaging Recycling (Item 5 on the Proxy Card) ...25 STOCK OWNERSHIP ...27 29 30 Compensation Discussion and Analysis ...30 Management Planning and Development Committee Report...-End ...48 Option Exercises and Stock Vested...50 Pension Benefits ...51 ...
  • Pizza Hut 2012 Annual Report - Page 19
    ... PROXY STATEMENT For Annual Meeting of Shareholders To Be Held On May 15, 2013 The Board of Directors ... Annual Meeting, shareholders will vote on several important Company matters. In addition, our management ... our Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting....
  • Pizza Hut 2012 Annual Report - Page 20
    ...AN ADMISSION TICKET OR PROOF THAT YOU OWN YUM COMMON STOCK, YOU MAY NOT BE ADMITTED INTO THE ANNUAL MEETING. Please note ...up questions will be permitted. Who may vote? You may vote if you owned YUM common stock as of the close of business on the record date, March 18, 2013. Each share of YUM common ...
  • Pizza Hut 2012 Annual Report - Page 21
    ... Direct Stock Purchase Plan, the administrator of this program, as the shareholder of record, may only vote the shares for... May 14, 2013. Proxy Statement Can I vote at the Annual Meeting? Shares registered directly ...you the right to vote the shares. Even if you plan to attend the Annual Meeting, we ...
  • Pizza Hut 2012 Annual Report - Page 22
    ... firms have the authority under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on... In order for us to conduct our Annual Meeting, a majority of the outstanding shares of YUM common stock, as of March 18, 2013, ...
  • Pizza Hut 2012 Annual Report - Page 23
    ... Annual Meeting. What if other matters are presented for consideration at the Annual Meeting? As of the date of this proxy statement, our management knows of no matters that will be presented for consideration at the Annual Meeting other than those matters discussed in...
  • Pizza Hut 2012 Annual Report - Page 24
    GOVERNANCE OF THE COMPANY The business and affairs of YUM are managed under the direction of the Board of Directors. The Board believes that good corporate governance is a critical factor in achieving business success and in fulfilling the Board's ...
  • Pizza Hut 2012 Annual Report - Page 25
    ... Annual Meeting and 8 of the Company's 11 then directors attended the 2012 Annual Meeting. How does ... that the Company presents its message and strategy to shareholders, employees, customers, franchisees and business ... a new position of lead director, after YUM! BRANDS, INC. - 2013 Proxy Statement ...
  • Pizza Hut 2012 Annual Report - Page 26
    ... with sufficient authority to ensure independent oversight of the Company and its management. The lead director position has no term limit and is subject ... to ensure independent oversight of the Company and its management. The lead director position has no term limit and is ...
  • Pizza Hut 2012 Annual Report - Page 27
    ... Audit Committee and our Chief Financial Officer. The Audit Committee also receives reports at each meeting regarding ...-term incentives and require executives to personally invest in Company stock. In 2013, the Management Planning and Development Committee of the Board of Directors oversaw the ...
  • Pizza Hut 2012 Annual Report - Page 28
    ... and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and... addition to our policy on communicating with our non-management directors. Any person, whether or not an employee, who has a concern about the conduct of the Company or any ...
  • Pizza Hut 2012 Annual Report - Page 29
    ... time the adequacy of the Company's Corporate Governance Principles • Receives comments from all directors and reports annually to the ... Walter • Exercises all of the powers of the Board in the management of the business and affairs of the Company consistent with applicable law while the ...
  • Pizza Hut 2012 Annual Report - Page 30
    ... of Directors expects non-management directors to hold a meaningful number of shares of Company common stock and expects non-management ... interests of directors with those of our shareholders. How much YUM stock do the directors own? Stock ownership information for each director nominee is shown in ...
  • Pizza Hut 2012 Annual Report - Page 31
    ... for election this year to hold office until the 2014 Annual Meeting and until their respective successors are elected and ... the nominees below contains information regarding the person's service as a director, business experience, director positions held currently or at any time during the last ...
  • Pizza Hut 2012 Annual Report - Page 32
    ...Co.'s Treasury & Securities Services business, one of the world's largest cash management providers and...: • Operating and management experience, including as chairman of international sales and distribution business... 2006 to May 2008, he was Senior Advisor and Managing Director to Warburg Pincus...
  • Pizza Hut 2012 Annual Report - Page 33
    ... president and chief executive officer of global travel-related services company • Expertise in finance, marketing and international business development • Public company directorship and committee experience • Independent of...
  • Pizza Hut 2012 Annual Report - Page 34
    ... Officer, KFC and Pizza Hut from August 1996 to July 1997, at which time he became acting ... Division. Prior to this position, he was the Vice President of North Asia for both KFC and Pizza Hut. Specific qualifications, experience, skills and expertise: • Operating and management ...
  • Pizza Hut 2012 Annual Report - Page 35
    ... nominated by the Board of Directors. What vote is required to elect directors? A nominee will be elected as a director if the number of "FOR" votes exceeds the number of "AGAINST" votes. Our policy regarding the election of directors can be found in our Corporate ...
  • Pizza Hut 2012 Annual Report - Page 36
    ... for professional services rendered by KPMG for the audit of the Company's annual financial statements for 2012 and..., and fees billed for audit-related services, tax services and all other... over financial reporting, statutory audits and services rendered in connection with the Company's securities...
  • Pizza Hut 2012 Annual Report - Page 37
    ... and retain the talented leaders necessary for our Company to succeed in the highly competitive market for talent, while maximizing shareholder returns. This approach has made our management team a key driver in the Company's strong performance over both the long...
  • Pizza Hut 2012 Annual Report - Page 38
    ... (from approximately 90% stock appreciation rights and 10% performance share plan units in 2012); • Eliminating CEO's Accruals under Company's Pension Equalization ... is advisory and non-binding on the Company, the Board of Directors and the Management Planning and Development Committee ...
  • Pizza Hut 2012 Annual Report - Page 39
    ITEM 4 Re-Approval of YUM! Brands, Inc. Long Term Incentive Plan Performance ... does not seek to increase the number of shares of common stock that may be issued under ... otherwise be the responsibility of the Committee. The Management Planning and Development Committee of the Company's Board currently ...
  • Pizza Hut 2012 Annual Report - Page 40
    ... stock under each option shall not be less than the closing price of a share of stock on the date the option is granted. The option ... Participant to receive the amount by which the fair market value of a specified number of shares on the exercise date exceeds an exercise price established by the ...
  • Pizza Hut 2012 Annual Report - Page 41
    ...; market value added or economic value added; profits; return on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant unit development. Each goal may ...
  • Pizza Hut 2012 Annual Report - Page 42
    ... is disabled, as that term is defined in the Internal Revenue Code). The excess of the fair market value of the stock at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the ...
  • Pizza Hut 2012 Annual Report - Page 43
    ...and share ownership of the proponent upon request. Packaging Recycling WHEREAS discarded food service ... should include aggressive recycling goals for all food service packaging as feasible and .... SUPPORTING STATEMENT We believe the requested report is in the best interest of YUM! and its shareholders...
  • Pizza Hut 2012 Annual Report - Page 44
    ... PACKAGING RECYCLING Management Statement in Opposition to Shareholder Proposal What is the Company's position regarding this proposal? The Board of Directors recommends that ... food packaging and including greater recycled content: • Pizza Hut U.S.'s, packaging includes 95% fiber sourced ...
  • Pizza Hut 2012 Annual Report - Page 45
    ... holds in excess of one percent of the outstanding YUM common stock. Directors and executive officers as a group beneficially own approximately 2%. Our ... position. The table shows the number of shares of common stock and common stock equivalents beneficially owned as of ...
  • Pizza Hut 2012 Annual Report - Page 46
    ... options and SARs awarded under our employee or director incentive compensation plans. For stock options, we report shares equal to the ...equivalents held in deferred compensation accounts which become payable in shares of YUM common stock at a time (a) other than at termination ...
  • Pizza Hut 2012 Annual Report - Page 47
    ... of YUM common stock to file with the SEC reports of their ownership and changes in their ownership of YUM common stock. Directors, executive officers and greater-than-ten percent shareholders are also required to furnish YUM with copies of...
  • Pizza Hut 2012 Annual Report - Page 48
    ... as our total shareholder return during the 2012 calendar year was 15%. Relationship Between Company Pay and Performance Our ... interests of our shareholders • Support our vision to be the Defining Global Company That Feeds the World • Pay for performance •...
  • Pizza Hut 2012 Annual Report - Page 49
    ...-over-year EPS growth and the related increase in our stock price and Total Shareholder Return ("TSR") over the past ten years. ... basis and the initial impact of expensing stock options in 2005. The special items excluded are the same as those excluded in the Company's annual earnings releases. EPS ...
  • Pizza Hut 2012 Annual Report - Page 50
    ... paid and annual long-term incentive award value has remained relatively ï¬,at from 2009-2012. Since the beginning of 2008, the cumulative total shareholder return for our investors was ... 5 000 0 2008(2) 2009 2010 2011 2012 (1) Represents our CEO's base salary, stock options/...
  • Pizza Hut 2012 Annual Report - Page 51
    ...bonus and will receive an annual interest allocation on his account balance equal to 120% of the applicable federal rate. (See footnote ... Executive Officers and other executives to personally invest in Company stock Key Elements of Our Executive Compensation Program • Pay for Performance -...
  • Pizza Hut 2012 Annual Report - Page 52
    ... change in control • No hedging or pledging of Company stock • No inclusion of the value of equity awards in pension calculations • No tax gross-ups • ...-2012 ALL OTHER NAMED EXECUTIVE OFFICERS TARGET PAY MIX-2012 21% Proxy Statement 13% 21% 58% 21% ...
  • Pizza Hut 2012 Annual Report - Page 53
    ... and Development Committee or management • Meridian's partners and employees who provide services to the Committee are prohibited from owning YUM ... often correlates with the market value of compensation for senior executive positions. For companies with significant franchise operations, ...
  • Pizza Hut 2012 Annual Report - Page 54
    ... than target bonus when benchmarking pay opportunities with the Executive Peer Group. • Determination of Stock ... an annual interest allocation on his account balance equal to 120% of the applicable federal rate. ... potential and market value. Specific salary increases take into account these ...
  • Pizza Hut 2012 Annual Report - Page 55
    ... 2012 based on recommendations from management. The objectives were also reviewed by the Board to ensure the goals support the Company's overall ... at least 10% for over 10 years to optimize the long term and short term perspective on managing the business and believes this consistent year after year ...
  • Pizza Hut 2012 Annual Report - Page 56
    ...48 50% 24 System Sales Growth 15% 20% 200 20% 40 System Gross New Builds 550 889 200 20% 40 System Customer Satisfaction 100 165 165 10...adjusted for the impact of certain non-recurring costs within our Pizza Hut U.K. market. (3) Actual system sales growth was adjusted for the impact ...
  • Pizza Hut 2012 Annual Report - Page 57
    ... factor. This determination was based upon his leadership of the Taco Bell, Pizza Hut and KFC US Divisions and Yum! Restaurants International Division along with .... Each SAR and stock option was granted with an exercise price based on the closing market price of the underlying YUM common ...
  • Pizza Hut 2012 Annual Report - Page 58
    ...-year EPS compound annual growth rate as set forth in the chart below: EPS Growth Payout as % of Target
  • Pizza Hut 2012 Annual Report - Page 59
    ... cap placed on the broad-based employee plan. Effective January 1, 2013, the Company no longer ... retirement from the Company, Mr. Su will be required to reimburse the Company for the tax reimbursements for certain stock .... (2) Based on YUM closing stock price of $66.40 as of December 31, 2012. (3) Mr....
  • Pizza Hut 2012 Annual Report - Page 60
    ...stock option and stock appreciation rights grants annually at the Committee's January meeting. This meeting... approximately 17,000 options or stock appreciation rights annually. In the case of these grants... the terms of each award, except the actual number of stock appreciation rights or options, which...
  • Pizza Hut 2012 Annual Report - Page 61
    ...law. Hedging and Pledging of Company Stock Under our Code of Conduct, no employee or director is permitted to ... themselves from, or profit from, a decline in the Company stock price. Similarly, no employee or director may enter into hedging transactions in the Company's stock. Such transactions ...
  • Pizza Hut 2012 Annual Report - Page 62
    ... are our Chief Executive Officer, Chief Financial Officer and our three other most ... with SEC rules. Summary Compensation Table Change in Pension Value and Nonqualified Deferred All ... 1,474,038 - 2010 1,400,000 - 2012 500,308 Stock Awards ($)(2) (d) 773,022 773,024 740,005 Non-Equity ...
  • Pizza Hut 2012 Annual Report - Page 63
    ... Statements and Supplementary Data" of the 2012 Annual Report in Notes to Consolidated Financial Statements at Note 15, "Share-based and Deferred Compensation Plans...). Going forward, he will receive a market rate of interest on his pension account plus an annual benefit allocation equal ...
  • Pizza Hut 2012 Annual Report - Page 64
    ...fees, "dead head" costs of flying planes to and from locations for personal use, and contract labor; for Mr. Su: ...the Company-provided tax reimbursement for China income taxes incurred on deferred income distributions and stock option exercises which exceed the marginal Hong Kong tax rate. (3) These ...
  • Pizza Hut 2012 Annual Report - Page 65
    ...statement. If the 10% growth target is achieved, 100% of the PSUs will pay out in shares of Company stock. If less than 7% ..."Financial Statements and Supplementary Data" of the 2012 Annual Report in Notes to Consolidated Financial Statements at Note 15, "Share-based and Deferred Compensation Plans." ...
  • Pizza Hut 2012 Annual Report - Page 66
    ...at Fiscal Year-End The following table shows the number of shares covered by exercisable and unexercisable stock options, SARs, and unvested RSUs and ... Equity incentive Market plan awards: plan awards: Number Value of market or Number of of Shares payout value unearned or Units Shares or Units of of ...
  • Pizza Hut 2012 Annual Report - Page 67
    ... Market plan awards: plan awards: Number Value of market or Number of of Shares payout value unearned or Units ...) that vests after five years. (3) The market value of these awards are calculated by multiplying the number of shares covered by the award by $66.40, the closing price of YUM stock on the ...
  • Pizza Hut 2012 Annual Report - Page 68
    ... including accumulated dividends and before payment of applicable withholding taxes and broker commissions. Option Awards Stock Awards Value Number of Value Number of realized on Shares Acquired Realized on Shares Acquired Vesting on Exercise ...
  • Pizza Hut 2012 Annual Report - Page 69
    ... the YUM! Brands Retirement Plan ("Retirement Plan") 2012 FISCAL YEAR PENSION BENEFITS TABLE Number of Years of ... consistent with those used in the Company's financial statements. Proxy Statement (1) YUM! Brands Retirement Plan The Retirement Plan and the Pension Equalization Plan (discussed ...
  • Pizza Hut 2012 Annual Report - Page 70
    ...¬ts financed by the Company Any other Company financed benefits that are attributable to periods of pensionable service and that are derived from a plan maintained or contributed to by the Company or one or more of the group of ...
  • Pizza Hut 2012 Annual Report - Page 71
    ... Program are designed to match the performance of actual investments; that is, they provide market rate returns and do not provide for...the annual incentive are allocated, which is the same day we make our annual stock appreciation right grants. Amounts attributable to the matching contribution under ...
  • Pizza Hut 2012 Annual Report - Page 72
    ... EID Program earnings are market based returns and, therefore, are not reported in the Summary Compensation Table... LRP. For above market earnings on nonqualified deferred compensation, see the "Change in Pension Value and ... amounts distributed to pay payroll taxes due upon their account balance under ...
  • Pizza Hut 2012 Annual Report - Page 73
    ...¬cer's compensation and service levels as of such date and, if applicable, based on the Company's closing stock price on that date. These benefits are in ... affect these amounts include the timing during the year of any such event, the Company's stock price and the executive's ...
  • Pizza Hut 2012 Annual Report - Page 74
    ... Novak, Grismer, Su, Carucci and Pant would have received Company-paid life insurance of $3,360,000; $1,100,000; $2,365,...be entitled to receive the following: Proxy Statement • a proportionate annual incentive assuming achievement of target performance goals under the bonus plan or, if higher, ...
  • Pizza Hut 2012 Annual Report - Page 75
    ...410,000 $ 4,932,000 $ 3,720,076 Annual Incentive 4,584,320 760,760 ...846,785 1,620,000 Accelerated Vesting of Stock Options and SARs 22,865.... Effective March 15, 2013, the Company eliminated excise tax gross-ups and implemented a best net after-tax method. See the Company's Compensation Discussion and...
  • Pizza Hut 2012 Annual Report - Page 76
    ... (c) represent the grant date fair value for annual stock retainer awards granted to directors in 2012. (2) Amounts in column (d) represent the... Annual Compensation. Each director who is not an employee of YUM receives an annual stock grant retainer with a fair market value of $170,000 and an annual ...
  • Pizza Hut 2012 Annual Report - Page 77
    ... Walter in 2012) receives an additional $15,000 stock retainer annually. Initial Stock Grant upon Joining Board. Non-employee directors also receive a one-time stock grant with a fair market value of $25,000 on the date of grant upon...
  • Pizza Hut 2012 Annual Report - Page 78
    .... The SharePower Plan is administered by the Management Planning and Development Committee of the Board of Directors. The exercise price of a stock option or SAR... the RGM Plan is (i) to give restaurant general managers ("RGMs") the opportunity to become owners of stock, (ii) to align the interests of...
  • Pizza Hut 2012 Annual Report - Page 79
    ... was amended and restated effective November 16, 2012. The charter is reviewed by management at least annually, and any recommended changes are presented to the Audit Committee for ... effectiveness of internal control over financial reporting. YUM! BRANDS, INC. - 2013 Proxy Statement 61
  • Pizza Hut 2012 Annual Report - Page 80
    ... independent auditors all annual and quarterly financial statements prior to their issuance. During 2012, management advised the ... the Committee recommended to the Board of Directors that it include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for ...
  • Pizza Hut 2012 Annual Report - Page 81
    ... receive future annual reports and proxy statements from us and to vote their shares ....amstock.com, click on Shareholder Account Access, log in and locate the option to receive Company mailing ..., if applicable, this proxy statement and Annual Report, to multiple shareholders sharing an address unless ...
  • Pizza Hut 2012 Annual Report - Page 82
    ... follow to nominate persons for election as directors or to introduce an item of business at an Annual Meeting of Shareholders that is not included in our ... statement. These procedures provide that nominations for director nominees and/or an item of business to be introduced at an Annual Meeting of ...
  • Pizza Hut 2012 Annual Report - Page 83
    ...or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (b) an Exercise Price established by ...the composite tape for securities listed on the New York Stock Exchange (or if no sales of stock were made on...
  • Pizza Hut 2012 Annual Report - Page 84
    ... later granted Award may be less than the Fair Market Value of the Stock at the time of such grant; provided, however, that an exercise price below the ...on assets; return on equity; return on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or...
  • Pizza Hut 2012 Annual Report - Page 85
    ... of determining the maximum number of shares of Stock available for delivery under the Plan. If the exercise price of any stock option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number of ...
  • Pizza Hut 2012 Annual Report - Page 86
    ... the Participant, through the surrender of shares of Stock which the Participant already owns, or through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan. Subsections 4.5, 4.6 and 4.7 shall be ...
  • Pizza Hut 2012 Annual Report - Page 87
    ... business combinations may provide for exercise prices that are less than the Fair Market Value of the Stock at the time of the replacement grants, if the Committee determines that ... pay any benefits to any person. Proxy Statement YUM! BRANDS, INC. - 2013 Proxy Statement A-5
  • Pizza Hut 2012 Annual Report - Page 88
    ... Performance Shares (including any Award payable in Stock which is granted in conjunction with a Company.... Proxy Statement Section 6 Committee 6.1 Administration. The authority to control and manage the operation and... and any decision made by it under the Plan is final and binding on all persons...
  • Pizza Hut 2012 Annual Report - Page 89
    ... discharge its duties. The records of the Company and Subsidiaries as to an employee's or Participant's employment (or other provision of services), termination of employment ...Board; (ii) no amendments may increase the limitations on the number of shares set forth in subsections 4.2(b) and 4.2(e) or ...
  • Pizza Hut 2012 Annual Report - Page 90
    ... become vested prior to the date the employee first performs such services. Fair Market Value. For purposes of determining the "Fair Market Value" of a share of Stock as of any date, Fair Market Value shall mean the average between ...
  • Pizza Hut 2012 Annual Report - Page 91
    ... 409A, options and SARs shall not be granted to employees or directors of Subsidiaries unless the ownership of the Subsidiary satisfies Treas. Reg. §1.409A-1(b)(5)(iii). (i) Stock. The term "Stock" shall mean shares of common stock of the Company. Proxy Statement YUM! BRANDS, INC. - ...
  • Pizza Hut 2012 Annual Report - Page 92
    ... par value Name of Each Exchange on Which Registered New York Stock Exchange... Act). The aggregate market value of the voting stock (which consists solely of shares of Common ..., to be "affiliates" of the registrant. The number of shares outstanding of the registrant's Common Stock as of February 12...
  • Pizza Hut 2012 Annual Report - Page 93
    ...Financial Data ...14 Management's Discussion and Analysis of Financial Condition and Results of Operations...15 Quantitative and Qualitative Disclosures About Market Risk ...35 Financial Statements and ...Fees and Services ...72 PART IV ITEM 15 73 Exhibits and Financial Statement Schedules...
  • Pizza Hut 2012 Annual Report - Page 94
    ... I, Item 1A of this Form 10-K and (ii) the factors described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part ... future filings or communications regarding our business results. Form 10-K 2 YUM! BRANDS, INC. - 2012 Form 10-K
  • Pizza Hut 2012 Annual Report - Page 95
    ... three concepts of KFC, Pizza Hut and Taco Bell (the "Concepts"), the Company develops, operates, franchises and ...700 system restaurants, primarily Company-owned KFCs and Pizza Huts. In 2012, the China Division recorded ... basis. Pizza Hut and, on a much more limited basis, KFC offer delivery service. ...
  • Pizza Hut 2012 Annual Report - Page 96
    ... U.S. units, and 1 percent of the India units are Company-owned. • Pizza Hut operates in the delivery and casual dining segments around the world. Outside of the ... of year end 2012, Pizza Hut was the leader in the U.S. pizza QSR segment, with a 16 percent market share in that ...
  • Pizza Hut 2012 Annual Report - Page 97
    ... U.S. Division The Company, along with the representatives of the Company's KFC, Pizza Hut and Taco Bell franchisee groups, are members in ...basis. Research and Development ("R&D") The Company operates R&D facilities in Shanghai, China (China Division); Plano, Texas (Pizza Hut U.S. and YRI); Irvine, ...
  • Pizza Hut 2012 Annual Report - Page 98
    ...which the Company operates. The Company and its Concepts consider their employee relations to be good. (C) Financial ... Statements in Part II, Item 8, pages 36 through 70. (D) Available Information located ... our business. A significant and growing portion of our restaurants are located in China...
  • Pizza Hut 2012 Annual Report - Page 99
    ... outside the U.S., especially China and other emerging markets. The successful development of new units will depend in large part on our ability...¬cant in the future as we increase our presence in existing markets. Form 10-K Our operating results are closely tied to the success of our Concepts' ...
  • Pizza Hut 2012 Annual Report - Page 100
    ... the process of refranchising restaurants in the U.S., which has reduced and is expected to continue to reduce the percentage of Company ownership of KFCs, Pizza Huts, and Taco Bells in the U.S. Once executed, the success of the refranchising ...
  • Pizza Hut 2012 Annual Report - Page 101
    ... to increase materially. We are subject to income taxes as well as non-income based taxes, such as payroll, sales, use, value-added, net worth, property, withholding and franchise taxes in both the U.S. and various foreign jurisdictions. We are ...
  • Pizza Hut 2012 Annual Report - Page 102
    ... Hut U.S. and YRI corporate headquarters and a research facility in Plano, Texas are owned by Pizza Hut. Taco Bell leases its corporate headquarters and ... years and generally have renewal options; however, Pizza Hut delivery/ ITEM 3 Legal Proceedings condition or cash ...
  • Pizza Hut 2012 Annual Report - Page 103
    .... Bergren served as President and Chief Concept Officer of Pizza Hut, a position he held beginning in November 2006. Mr. Bergren served ... Relations of YUM from September 2007 to June 2008; and Chief Financial Officer of Pizza Hut UK from May 2005 to September 2007. Muktesh Pant, 58, is Chief ...
  • Pizza Hut 2012 Annual Report - Page 104
    ...low NYSE composite closing sale prices by quarter for the Company's Common Stock and dividends per common share. $ 2011 Quarter First Second ... share of Common Stock, one of which had a distribution date of February 3, 2012. The Company targets an annual dividend payout ratio ...
  • Pizza Hut 2012 Annual Report - Page 105
    ...table provides information as of December 29, 2012 with respect to shares of Common Stock repurchased by the Company during the quarter then ended: Total number of shares ... our outstanding Common Stock. On November 16, 2012, our Board of Directors authorized additional share repurchases ...
  • Pizza Hut 2012 Annual Report - Page 106
    ...DATA (in millions, except per share and unit amounts) Summary of Operations Revenues Company sales Franchise and license fees and... same store sales growth(c) Shares outstanding at year end Cash dividends declared per Common Stock Market price per share at year end $ 11,833 1,800 13,633 (37) 78 2,...
  • Pizza Hut 2012 Annual Report - Page 107
    ... restaurants in more than 125 countries and territories operating primarily under the KFC, Pizza Hut or Taco Bell brands. In December of 2011 we ...are included in the Company's results for 2011 and 2010. The Company's primary restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders in...
  • Pizza Hut 2012 Annual Report - Page 108
    ... and share repurchases. The Company has one of the highest returns on invested capital in the Quick Service Restaurants ("... developed the KFC and Pizza Hut brands into the leading quick service and casual ... testing the additional restaurant concepts of Pizza Hut Home Service (pizza delivery) and East ...
  • Pizza Hut 2012 Annual Report - Page 109
    ...(a) REPORTED EFFECTIVE TAX RATE EFFECTIVE TAX RATE BEFORE SPECIAL ITEMS (a) See Note 3 for the number of shares used in these calculations. $ $... LJS and A&W brands. Other Special Items Income (Expense) includes the depreciation reductions from Pizza Hut UK and KFC U.S. restaurants impaired upon our ...
  • Pizza Hut 2012 Annual Report - Page 110
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Year 2012 Detail of Special Items U.S. Refranchising gain (loss) YUM Retirement Plan settlement charge Gain upon acquisition of Little Sheep Losses associated with refranchising equity markets ...
  • Pizza Hut 2012 Annual Report - Page 111
    ...the U.S. During the fourth quarter of 2012, we refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores allows the franchisee to pay continuing ...
  • Pizza Hut 2012 Annual Report - Page 112
    ... which we choose to continue investing capital. In the U.S., we are targeting Company ownership of KFC, Pizza Hut and Taco Bell restaurants of about 10%, .... Additionally, in December 2012 we refranchised 331 remaining Company-owned dine-in restaurants in the Pizza Hut UK business and during 2010, we ...
  • Pizza Hut 2012 Annual Report - Page 113
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes the impact of refranchising on Total revenues as described above: 2012 Decreased Company sales Increased Franchise and license fees and income DECREASE IN TOTAL ...
  • Pizza Hut 2012 Annual Report - Page 114
    ...at end of 2011 New Builds Acquisitions(c) Refranchising Closures Other BALANCE AT END OF 2012 % of Total ... (435) (1) 14,500 100% China Balance at end of 2010 New Builds Refranchising Closures Balance at end of 2011 New Builds Acquisitions(c) Refranchising Closures BALANCE AT END OF 2012 % of Total ...
  • Pizza Hut 2012 Annual Report - Page 115
    ...and Analysis of Financial Condition and Results of Operations U.S. Balance at end of 2010 New Builds ... at end of 2011 New Builds Acquisitions Closures BALANCE AT END OF 2012 % of Total Franchisees ...2011 represent the number of LJS and A&W units as of the beginning of 2011. Therefore, 2011 New Builds...
  • Pizza Hut 2012 Annual Report - Page 116
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations System Sales Growth The following tables ... negative impact for Worldwide system sales for the year to date ended December 29, 2012. Company-Operated Store Results The following tables ...
  • Pizza Hut 2012 Annual Report - Page 117
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations In 2012, the increase in China Company sales associated with store portfolio actions was... profit were Company same-store sales growth of 4%, which was partially offset by wage rate inn..
  • Pizza Hut 2012 Annual Report - Page 118
    ... driven by refranchising, new unit development and positive franchise same-store sales. YRI Franchise... increase was driven by new unit development and positive franchise same-store sales. YRI Franchise... increase was driven by refranchising, positive franchise same-store sales and new unit development,...
  • Pizza Hut 2012 Annual Report - Page 119
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations The increase in YRI G&A expenses for 2011 was driven by increased investment in strategic growth markets, including the acquisition of our Russia business in 2010, partially offset by G&A ...
  • Pizza Hut 2012 Annual Report - Page 120
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Profit Amount 2011 $ 908 673 ... was driven by higher restaurant operating costs, higher franchise and license expenses and same-store sales declines, partially offset by ...
  • Pizza Hut 2012 Annual Report - Page 121
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Income Taxes The reconciliation of income taxes calculated at the U.S. federal tax statutory rate to our effective tax rate is set forth below: 2012 751 4 (165) (47) - 14 (20) 537 2011 580 2 (...
  • Pizza Hut 2012 Annual Report - Page 122
    ...ows from the operations of our company stores and from our extensive franchise operations which require a limited YUM investment. Net...historically experienced. We currently have investment-grade ratings from Standard & Poor's Rating Services (BBB) and Moody's Investors Service (Baa3). While we do not...
  • Pizza Hut 2012 Annual Report - Page 123
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Contractual Obligations In addition to any discretionary spending we may choose to make, our significant contractual obligations and payments as of December 29, 2012 included: Less than 1 ...
  • Pizza Hut 2012 Annual Report - Page 124
    ... fair value determinations if such franchise agreement is determined to not be at prevailing market rates.... consistency in royalty rates as a percentage of sales is appropriate as the Company and franchisee share in the impact ... impairment was recorded. Form 10-K 32 YUM! BRANDS, INC. - 2012 Form 10...
  • Pizza Hut 2012 Annual Report - Page 125
    ... Taco Bell U.S. and KFC U.S. operating segments and our Pizza Hut United Kingdom ("U.K.") business unit. Within our Taco Bell U.S. operating segment, 181 ...-of-year goodwill). Within our Pizza Hut U.K. business unit, 359 dine-in and delivery restaurants were refranchised (...
  • Pizza Hut 2012 Annual Report - Page 126
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations ... assessment of current market conditions. Our expected long-term rate of return on U.S. plan assets,... this rate is appropriate given the composition of our plan assets and historical market returns ...
  • Pizza Hut 2012 Annual Report - Page 127
    ... in place to monitor and control their use. Interest Rate Risk We have a market risk exposure to changes in interest ... billion as of December 29, 2012. Operating in international markets exposes the Company to movements in foreign currency exchange rates. The Company's primary exposures result from ...
  • Pizza Hut 2012 Annual Report - Page 128
    ...Page Reference Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Consolidated ...25, 2010 Notes to Consolidated Financial Statements Management's Responsibility for Financial Statements 37 38... 41 42 43-70 70 Financial Statement Schedules No schedules are required...
  • Pizza Hut 2012 Annual Report - Page 129
    ... Accounting Firm The Board of Directors and Shareholders YUM! Brands, Inc. We have ... statements, assessing the accounting principles used and significant estimates made by management, ... of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely ...
  • Pizza Hut 2012 Annual Report - Page 130
    ...1,733 12,626 $ 2010 9,783 1,560 11,343 Revenues Company sales Franchise and license fees and income Total revenues Costs and Expenses,... SHARE DILUTED EARNINGS PER COMMON SHARE DIVIDENDS DECLARED PER COMMON SHARE See accompanying Notes to Consolidated Financial Statements. Form 10-K $ $ $ $ 3,874 ...
  • Pizza Hut 2012 Annual Report - Page 131
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Comprehensive ... losses arising during the year on pension and post-retirement plans Tax (expense) benefit ...INC. See accompanying Notes to Consolidated Financial Statements. $ 2012 1,608 $ 2010 1,178 $ 27 ...
  • Pizza Hut 2012 Annual Report - Page 132
    ...or less, net Repurchase shares of Common Stock Excess tax benefit from share-based compensation Employee... Common Stock Other, net NET CASH USED IN FINANCING ACTIVITIES EFFECT OF EXCHANGE RATES ON... accompanying Notes to Consolidated Financial Statements. Form 10-K $ 40 YUM! BRANDS, INC. - 2012 ...
  • Pizza Hut 2012 Annual Report - Page 133
    ... deferred credits Total Liabilities Redeemable noncontrolling interest Shareholders' Equity Common Stock, no par value, 750 shares authorized; 451 shares and 460 shares issued in ... 18 2,052 (247) 1,823 93 1,916 8,834 YUM! BRANDS, INC. - 2012 Form 10-K 41
  • Pizza Hut 2012 Annual Report - Page 134
    ... (net of tax impact of $1 million) Comprehensive Income Dividends declared Repurchase of shares of Common Stock Employee stock option and SARs exercises (includes tax impact ...declared Repurchase of shares of Common Stock Employee stock option and SARs exercises (includes tax impact...
  • Pizza Hut 2012 Annual Report - Page 135
    ... Inc. and Subsidiaries (collectively referred to herein as "YUM" or the "Company") comprises primarily the worldwide operations of KFC, Pizza Hut and Taco Bell (collectively the "Concepts"). YUM is the world's largest quick service restaurant company ...
  • Pizza Hut 2012 Annual Report - Page 136
    ... previously reported Net Income - YUM! Brands, Inc. Franchise and License Operations. We execute franchise or ... Revenue Recognition. Revenues from Company-owned restaurants are recognized when payment is tendered at the time of sale. The Company presents sales net of sales-related taxes. Income from ...
  • Pizza Hut 2012 Annual Report - Page 137
    ... options and stock appreciation rights ("SARs"), in the Consolidated Financial Statements as compensation cost over the service period based on their fair value on the ... would make such as sales growth and margin improvement. The discount rate used in the fair value calculation is ...
  • Pizza Hut 2012 Annual Report - Page 138
    ... and liabilities are measured using enacted tax rates expected to apply to taxable income ... an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants.... that are held for sale. Leases and Leasehold Improvements. The Company leases land, buildings or both...
  • Pizza Hut 2012 Annual Report - Page 139
    ... is generally estimated using discounted expected future after-tax cash ï¬,ows from Company operations and franchise royalties. The discount rate is ...includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can ...
  • Pizza Hut 2012 Annual Report - Page 140
    ..., management of credit risk inherent in derivative instruments and fair value information. Common Stock Share Repurchases. From time to time, we ... as a reduction in retained earnings. Due to the large number of share repurchases and the increase in the market value of our stock over the past several ...
  • Pizza Hut 2012 Annual Report - Page 141
    ... they are indicative of our ongoing operations. In 2012, System sales and Franchise and license ... would require us to purchase their remaining shares owned upon exercise, which may ..., we have reported the results of operations for the entity in the appropriate line items of our Consolidated Statement ...
  • Pizza Hut 2012 Annual Report - Page 142
    ... - 63 During the fourth quarter of 2012, we refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores allows the franchisee to pay continuing ...
  • Pizza Hut 2012 Annual Report - Page 143
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes the 2012 and 2011 activity related to reserves for remaining lease obligations for closed stores. Estimate/ Decision Changes 3 2 2012 Activity 2011 Activity $ $ Beginning ...
  • Pizza Hut 2012 Annual Report - Page 144
    PART II ITEM 8 Financial Statements and Supplementary Data Property, Plant and Equipment Land Buildings and improvements Capital leases, primarily buildings Machinery and equipment Property, Plant and equipment, gross Accumulated depreciation and amortization PROPERTY, PLANT AND ...
  • Pizza Hut 2012 Annual Report - Page 145
    PART II ITEM 8 Financial Statements and Supplementary Data Intangible assets, net for the years ended 2012 and 2011 are as ... were no borrowings outstanding under the Credit Facility at December 29, 2012. The interest rate for most borrowings under the Credit Facility ranges from 1.00% ...
  • Pizza Hut 2012 Annual Report - Page 146
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes all Senior Unsecured Notes issued that remain ... executory costs, which include property taxes, maintenance and insurance. At December 29, 2012 we operated nearly 7,600 restaurants, leasing the ...
  • Pizza Hut 2012 Annual Report - Page 147
    ... to certain market risks relating to its ongoing business operations. The primary market risks managed by using derivative instruments are interest rate risk and cash ï¬,ow volatility arising from foreign currency ï¬,uctuations. We ...
  • Pizza Hut 2012 Annual Report - Page 148
    ... not a restaurant or restaurant group would be refranchised. 2012 Pizza Hut UK refranchising impairment (Level 3)(a) $ Little ... based on market rates. (a) See Note 4 for further discussions of Refranchising (gain) loss, including the Pizza Hut UK dine-in refranchising and the acquisition of Little ...
  • Pizza Hut 2012 Annual Report - Page 149
    ... recognized in Accumulated Other Comprehensive Income: 2011 - (14) (369) (383) $ Form 10-K $ Actuarial net loss Prior service cost $ $ U.S. Pension Plans 2012 421 $ 7 428 $ 2011 540 3 543 $ $ International Pension Plans 2012 2011 14 $ 30 ...
  • Pizza Hut 2012 Annual Report - Page 150
    PART II ITEM 8 Financial Statements and Supplementary Data Information for pension plans with an accumulated benefit obligation in excess of plan assets:...of plan assets, local laws and regulations. We do not plan to make any significant contributions to any pension plan outside...
  • Pizza Hut 2012 Annual Report - Page 151
    ... make up 81% of total pension plan assets at the 2012 measurement date, are to reduce interest rate and market risk and to provide ... with obligations. A mutual fund held as an investment by the Plan includes shares of YUM common stock valued at $0.7 million at December 29, 2012 and $0.7 million at ...
  • Pizza Hut 2012 Annual Report - Page 152
    ...than the average market price or the ending market price of the Company's stock on the date of grant. Potential awards to employees and non-employee directors under the LTIPs include stock options, incentive stock options, SARs, restricted stock, stock...
  • Pizza Hut 2012 Annual Report - Page 153
    ... compensation to purchase phantom shares of our Common Stock and receive a 33% Company match ... includes the vesting period. Historically, the Company has repurchased shares on the open market in excess of the amount .... The fair values of RSU and PSU awards are based on the closing price of our stock ...
  • Pizza Hut 2012 Annual Report - Page 154
    PART II ITEM 8 Financial Statements and Supplementary Data Impact on Net Income The components of share-based compensation expense and the...NOTE 16 Shareholders' Equity Under the authority of our Board of Directors, we repurchased shares of our Common Stock during 2012, 2011 and 2010. All amounts ...
  • Pizza Hut 2012 Annual Report - Page 155
    PART II ITEM 8 Financial Statements and Supplementary Data The details of our income tax ... 26.1% Statutory rate differential attributable to foreign operations. This item includes local taxes, withholding ... rate differential attributable to foreign operations' line. In 2012, $14 million of net tax ...
  • Pizza Hut 2012 Annual Report - Page 156
    PART II ITEM 8 Financial Statements and Supplementary Data The details of 2012 and 2011 deferred tax assets (liabilities) are set forth ...167) (121) (48) (336) 600 Operating losses and tax credit carryforwards Employee benefits Share-based compensation Self-insured casualty claims ...
  • Pizza Hut 2012 Annual Report - Page 157
    ... Revenues 2011 5,566 $ 3,192 3,786 82 12,626 $ We are principally engaged in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco Bell concepts. KFC, Pizza Hut and Taco Bell operate in 120, 97, and 27...
  • Pizza Hut 2012 Annual Report - Page 158
    PART II ITEM 8 Financial Statements and Supplementary Data China(b) YRI U.S. India Unallocated Occupancy and other(a)(c) Unallocated and corporate ..., net INCOME BEFORE INCOME TAXES Operating Profit; Interest Expense, Net; and Income Before Income Taxes 2012 2011 2010 $ 1,015 $ 908...
  • Pizza Hut 2012 Annual Report - Page 159
    PART II ITEM 8 Financial Statements and Supplementary Data China YRI U.S. India Corporate $ $ Long-Lived Assets(j) ..., $10 million and $9 million, respectively. 2012 and 2011 include depreciation reductions arising from the impairment of Pizza Hut UK restaurants we decided to sell in 2011 of $13 ...
  • Pizza Hut 2012 Annual Report - Page 160
    ...-wide class of hourly employees. On May 19, 2009 the court granted Taco Bell's... of people who use wheelchairs or scooters for mobility by failing to make its approximately 200 Company-owned ... in China. The shareholder plaintiff did not first submit a demand on the board of directors of the Company...
  • Pizza Hut 2012 Annual Report - Page 161
    ... Colorado. The complaint alleged that Pizza Hut did not properly reimburse its delivery drivers for various ... class of current and former Pizza Hut, Inc. delivery drivers. However, on March 11... opt-ins. The final number has yet to be determined but is expected to be approximately 6,000. Pizza Hut ...
  • Pizza Hut 2012 Annual Report - Page 162
    ...acquisition of Little Sheep of $74 million in the first quarter, refranchising losses associated with the Pizza Hut UK dine-in business of $24 million and $46 ..., respectively and a refranchising loss associated with the Pizza Hut UK dine-in business of $76 million in the third quarter. ...
  • Pizza Hut 2012 Annual Report - Page 163
    ...LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and the ... quarter ended December 29, 2012. ITEM 9B Other Information None. YUM! BRANDS, INC. - 2012 Form 10-K 71
  • Pizza Hut 2012 Annual Report - Page 164
    ... the Company's code of ethics and background of the directors appearing under the captions "Stock Ownership Information," "Governance of the Company," "Executive Compensation" and "Item 1: Election of Directors and Director biographies" is incorporated by...
  • Pizza Hut 2012 Annual Report - Page 165
    ... (a) (1) (2) Financial Statements: Consolidated Financial Statements filed as part of this report are listed under Part II, Item 8 of this Form 10-K. Financial Statement Schedules: No schedules are required because either the required ...
  • Pizza Hut 2012 Annual Report - Page 166
    ... of 1934, the registrant has duly caused this Form 10-K annual report to be signed on its behalf by the undersigned, ...) Vice President, Finance and Corporate Controller (principal accounting officer) Director Director Director Director Director Director Director Director Director Vice-Chairman of...
  • Pizza Hut 2012 Annual Report - Page 167
    ...to YUM's Quarterly Report on Form 10-Q for quarter ended March 24, 2012. YUM Director Deferred... herein by reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended ... Definitive Proxy Statement on Form DEF 14A for the Annual Meeting of Shareholders held on May 21...
  • Pizza Hut 2012 Annual Report - Page 168
    ...the Unified FoodService Purchasing Co-op, LLC, as filed herewith. YUM Restaurant General Manager Stock Option Plan, as effective April 1, 1999, and as ... for confidential treatment. Indicates a management contract or compensatory plan. 76 YUM! BRANDS, INC. - 2012 Form 10-K
  • Pizza Hut 2012 Annual Report - Page 169
    ... a lost or stolen certificate • Retrieve a duplicate Form 1099-B • Purchase shares of YUM through the Company's Direct Stock Purchase Plan • Sell shares held by AST Access accounts online at the following URL: https://secure...
  • Pizza Hut 2012 Annual Report - Page 170
    ...-0535 STOCK TRADING SYMBOL-YUM The New York Stock Exchange is the principal market for YUM Common Stock, ... INFORMATION Information about potential franchise opportunities is available at www.yumfranchises.com Yum! Brands' Annual Report contains many of the valuable trademarks owned and used by Yum! ...
  • Pizza Hut 2012 Annual Report - Page 171
    ... Morgan Chase and Co.'s Corporate and Investment Bank Scott O. Bergren 66 Chief Executive Officer, Pizza Hut U.S. and Chief Innovation Officer, Yum! Brands,...Walter 67 Founder and Retired Chairman/CEO, Cardinal Health, Inc. Patrick Grismer 51 Chief Financial Officer, Yum! ...
  • Pizza Hut 2012 Annual Report - Page 172
    Alone We're Delicious. Together We're Yum!® Yum! Brands, Inc., trades under the symbol YUM and is proud to meet the listing requirements of the NYSE, the world's leading equities market.