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Pizza Hut 2012 Annual Report Download

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Table of contents

  • Page 1
    Staying the Course China and a Whole Lot More 2012 Yum! Brands Annual Customer Mania Report
  • Page 2
    ... for per share amounts) Year-end 2012 2011 % B/(W) change Company sales Total revenues Operating Profit Net ... Brands Everywhere...5-6 Improving U.S. Brand Positions...7-8 Driving Long-Term Shareholder Value...9 Company with a Huge Heart...10 ABOUT THE PAPER USED FOR THIS REPORT The inks ...
  • Page 3
    ... 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%..., we are extremely proud that our five year average annual shareholder return, including stock appreciation and dividend reinvestment, is 14%...
  • Page 4
    ... This meeting gives us the opportunity to "go public" with our goals and commitments as well as showcase our management talent from around the ... to a growing confidence in our business model. restaurants around the world. Over 39,000 Building sales layers and expanding day...
  • 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 ... new cities and increase its penetration levels in existing markets. At 826 units, Pizza Hut Casual Dining is the leader in its ...
  • Page 6
    ... Hut Casual Dining. We will also continue to invest behind Pizza Hut Home Service, Little Sheep and East Dawning. Our new unit target of at least 700 remains unchanged for 2013. Pizza Hut Casual Dining restaurants in China. 826 China is the #1 retail growth opportunity in the world. As...
  • Page 7
    ... people in the top 10 emerging markets, compared to 58 restaurants per million in the U.S. In 2012, Yum! Restaurants International (YRI) which includes all countries outside the U.S., China and...record 949 new units, with 65% of them in emerging markets. It's clear we are a leader in emerging ...
  • Page 8
    innovative experiences with KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and Taco Bell. We will invest behind building each of these brands in India and expect all of them to drive tremendous future growth. We are on our way to making this business ...
  • Page 9
    ...headway 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...
  • Page 10
    ... everyday $10 large pizza offers. Given its sales and unit margin success, Pizza Hut stepped up new ... and were net-unit positive for the year. We added 150 net new units at Pizza Hut and over ... of negative same-store sales growth. go from about 5,000 to 8,000 units and Pizza Hut to expand ...
  • Page 11
    4 Drive industry-leading, long-term shareholder and franchisee value. penetrated markets like Pizza Hut UK and increasing our exposure ...Turkey, a highgrowth emerging market that has over 100 KFC and Pizza Hut restaurants. Our success executing our strategies has driven our Return...
  • Page 12
    ... COURSE is great news for 2013 and beyond. 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 and drive our growth around the world....
  • Page 13
    ... everywhere with one system operational excellence as our foundation Make 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 doors and...
  • Page 14
    ... improve U.S. brand positions, consistency and returns Drive industryleading, long-term shareholder and franchisee value Believe in All People Be Restaurant and Customer Maniacs...NOW! Recognize! Recognize! Recognize! how we win ...
  • Page 15
    ...your Board of Directors, we are pleased to invite you to attend the 2013 Annual Meeting of Shareholders ...your shares via a toll-free telephone number or over the Internet. If you received ... the proxy statement are available at www.yum.com/investors/investor_materials. asp. The Annual Report on Form 10...
  • Page 16
  • Page 17
    ... 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...proxy statement and the form of proxy are first being mailed to shareholders on or about April 5, 2013. By Order of the Board of Directors Christian ...
  • Page 18
    ... SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE EXECUTIVE COMPENSATION 27 29 30 Compensation Discussion and Analysis ...30 Management Planning and Development Committee Report ...43 Summary Compensation Table ...44 All Other ...
  • Page 19
    YUM! BRANDS, INC. 1441 Gardiner Lane Louisville, Kentucky 40213 PROXY STATEMENT For Annual Meeting of Shareholders To Be Held On May 15, 2013 The Board of Directors (the "Board of Directors" or the "Board") of YUM! Brands, Inc., a North Carolina corporation ("YUM...
  • Page 20
    ... will be your admission ticket. If you received the proxy statement and Annual Report by mail, you will find an ...of the Company will answer shareholders' questions of general interest following the Annual Meeting. In order to give a greater number of shareholders an opportunity to ask questions, ...
  • Page 21
    ..., you may vote those shares telephonically by calling the telephone number shown on the voting instruction form received from your ... Eastern Daylight Saving Time, on May 14, 2013. Proxy Statement Can I vote at the Annual Meeting? Shares registered directly in your name as the shareholder of record ...
  • Page 22
    ... authority under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on ... director nominees named in this proxy statement. In an uncontested election, a nominee will be elected as a director if the number of "FOR" votes exceeds the ...
  • Page 23
    ... the voting results? The Company will announce the voting results of the Annual Meeting on a Current Report on Form 8-K filed within four .... If any other matters properly come before the Annual Meeting and call for a vote of shareholders, validly executed proxies in the enclosed form returned to ...
  • 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.... The Board believes that its practices align management and shareholder interests. The corporate governance section of the Company website makes available the ...
  • Page 25
    ... Company. Mr. Novak's combined role as Chairman and CEO also ensures that the Company presents its message and strategy to shareholders, employees, customers, franchisees and business partners with a unified voice. Combining the Chairman ...
  • Page 26
    .... Proxy Statement What other significant Board practices does the Company have? • Private Executive Sessions. Our non-management directors meet in executive session at each regular Board meeting. The executive sessions are attended only by...
  • Page 27
    ... performance, customer satisfaction and shareholder return, emphasize long-term incentives and require executives to personally invest in Company stock. In 2013, the Management Planning and Development Committee of the Board of Directors ...
  • Page 28
    ... concerns regarding accounting and other matters in 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 of our people, with ...
  • Page 29
    ...Reviews the annual audited financial statements and results of the audit with management and the independent auditors • Reviews the Company's accounting and financial reporting principles and practices including any significant...
  • Page 30
    ..., the Company requires stock ownership by directors. The Board of Directors expects non-management directors to hold a meaningful number of shares of Company common stock and expects non-management directors to retain shares acquired as compensation as a ...
  • 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
    ... and distribution business • Expertise in branding, marketing, sales and international business development • Public company directorship and committee ... 2011. From October 2006 to May 2008, he was Senior Advisor and Managing Director to Warburg Pincus, a global private equity firm. ...
  • Page 33
    ... president and chief executive officer of global travel-related services company • Expertise in finance, marketing and international business development • Public ... 2006. Thomas C. Nelson Age 50 Director since 2006 Chairman, Chief Executive Officer and President,...
  • Page 34
    ... President and Chief Executive Officer, KFC and Pizza Hut from August 1996 to... Prior to this position, he was the Vice President of North Asia for both KFC and Pizza Hut....Operating and management experience, including as president of the Company's China Division • Expertise in marketing and ...
  • Page 35
    ... aforementioned nominees will serve as directors and hold office until the 2014 Annual Meeting of Shareholders and until their respective successors ...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 ...
  • Page 36
    ...$ 7,670,000 $ (1) Audit fees include fees for the audit of the annual consolidated financial statements, reviews of the interim condensed consolidated financial statements included in the Company's quarterly reports, audits of the effectiveness of the...
  • Page 37
    ...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 and short term...
  • Page 38
    ...units (from approximately 90% stock appreciation rights and 10% performance share plan units in 2012); • Eliminating... and non-binding on the Company, the Board of Directors and the Management Planning and Development Committee will review the voting results and consider shareholder concerns in ...
  • Page 39
    ... individuals those persons who shall receive awards, to determine the time or times of receipt, to determine the types of awards and the number of shares covered by the awards, to establish the terms, conditions, performance criteria, restrictions, and other ...
  • Page 40
    ... independent of any option grant. A SAR entitles the 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 Committee. The exercise price ...
  • Page 41
    ... the LTIP is satisfied by tendering shares of stock to the Company (by either actual delivery or by attestation), only the number of shares of stock ... equal to the excess of the fair market value of the stock acquired over the exercise price for those shares, and the Company will be entitled to a...
  • Page 42
    ... capital gains and losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise. • INCENTIVE STOCK OPTIONS. The... to the amount of cash received and the then fair market value of the distributed shares. The Company will be entitled to a corresponding ...
  • Page 43
    ... intends to present the following shareholder proposal at the Annual Meeting. We will furnish the address and share ownership of the proponent ... prepare a report by September 1, 2013 on the company's efforts to implement this strategy. The report, to be prepared at reasonable cost, may omit confi...
  • Page 44
    ITEM 5 SHAREHOLDER PROPOSAL REGARDING PACKAGING RECYCLING Management Statement in Opposition to Shareholder Proposal What is the Company's position regarding this proposal? The Board of Directors recommends that shareholders vote AGAINST this ...
  • Page 45
    ... common stock or stock equivalents within five years following their appointment to their current position. The table shows the number of shares of common stock and common stock equivalents beneficially owned as of December 31, 2012. ...
  • Page 46
    ... T. Carucci Muktesh Pant 9,529 334,372 7,782 351,683 89,458 441,141 All Directors and Executive Officers as a Group ...of SARs multiplied by the difference between the fair market value of our common stock at year-end and the exercise price divided by the fair market value of the stock). (3) These ...
  • Page 47
    ... Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of the outstanding shares of ... in their ownership of YUM common stock. Directors, executive officers and greater-than-ten percent shareholders are also required to furnish YUM with ...
  • Page 48
    ... year as our total shareholder return during the 2012 calendar year was 15%. Relationship Between Company Pay and Performance Our compensation..., we highlighted four major growth strategies we have communicated to investors for several years: • Build leading brands in China in every signifi...
  • Page 49
    ... ("TSR") over the past ten years. EARNINGS PER SHARE* - TEN YEAR GROWTH +534% Total Shareholder Return 17% 15% 14% 13% 13%... shareholders but our superior relative results suggests we are exceeding shareholder expectations compared to the market generally. YUM! BRANDS, INC. - 2013 Proxy Statement 31
  • Page 50
    EXECUTIVE COMPENSATION TOTAL SHAREHOLDER RETURN ONE-YEAR PERIOD ENDING DECEMBER 31, 2012 16% 15% 13% THREE-YEAR PERIOD ENDING DECEMBER ... base salary, bonus paid and annual long-term incentive award value has remained relatively ï¬,at from 2009-2012. Since the beginning of ...
  • Page 51
    ... invest in Company stock Key Elements of Our Executive Compensation Program • Pay for Performance... with those of shareholders by encouraging executives to grow the value of the Company. • Strong Stock Ownership Guidelines... have always required our Named Executive Officers (and top 600...
  • Page 52
    ... gross-ups upon change in control • No hedging or pledging of Company stock • No inclusion of the value of equity awards in pension calculations • No tax gross-... MIX-2012 ALL OTHER NAMED EXECUTIVE OFFICERS TARGET PAY MIX-2012 21% Proxy Statement 13% 21% 58%...
  • Page 53
    ... talent. 2010 Revenues Company Name Kimberly-Clark Corporation Kraft Foods Inc.... correlates with the market value of compensation for senior executive positions. For companies with significant franchise..., managing product introductions, marketing, driving new unit development, and driving customer...
  • Page 54
    .... For the Chief Executive Officer, the Company generally attempts to deliver pay at the 75th percentile of the market if he and the Company... an allocation to his pension account equal to 9.5% of his salary and target bonus and will receive an annual interest allocation on ...
  • Page 55
    ... performance targets were developed through the Company's annual financial planning process, which takes into account division growth strategies,...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 level ...
  • Page 56
    ...2012. (2) Actual operating profit growth was 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 of the 53rd week and the divestiture of LJS/A&W in...
  • Page 57
    ... determination was based upon his leadership of the Taco Bell, Pizza Hut and KFC US Divisions and Yum! Restaurants International Division along with the ... profit growth, system sales growth and customer satisfaction targets. Proxy Statement Long-Term Equity Performance-Based ...
  • Page 58
    ... 2012 can be earned based on a 3-year EPS growth over the period 20122014. The target, threshold and maximum shares that may be paid ... qualified plan designed to provide a retirement income based on years of service with the Company and average annual earnings. In addition, the YUM! Brands, Inc. ...
  • Page 59
    .... This is an unfunded, unsecured account-based retirement plan which allocates a percentage of pay to an account payable to the executive following the later to occur of the executive's retirement from the Company or attainment of age 65. For ...
  • Page 60
    ... No Named Executive Officers received Chairman's Award grants during 2012. Management ... Committee sets all the terms of each award, except the actual number of stock appreciation rights ... employment; and (b) the highest annual bonus awarded to the Named Executive Officer by the Company in any ...
  • Page 61
    .... Hedging and Pledging of Company Stock Under our Code of Conduct, no employee... from, or profit from, a decline in the Company stock price. Similarly, no employee or director may enter... Report The Management Planning and Development Committee of the Board of Directors reports that it has reviewed...
  • Page 62
    EXECUTIVE COMPENSATION The following tables provide information on the compensation of the Named Executive Officers for our 2012 fiscal year. The Company's Named Executive Officers are our Chief Executive Officer, Chief Financial Officer ...
  • Page 63
    ... contained in Part II, Item 8, "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." (4) Except as provided below and...
  • Page 64
    ... fees, "dead head" costs of flying planes to and from locations for personal use, and contract labor... Kong tax rate. (3) These amounts reflect the income each executive was deemed to receive from IRS tables...preparation assistance. For Mr. Grismer and Mr. Pant, this column also includes Company annual ...
  • Page 65
    ...the 10% growth target is achieved, 100% of the PSUs will pay out in shares of Company stock. If less than 7% compounded EPS ..."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
    ...,898 605,966 - - Stock Awards Equity incentive 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 unearned shares, units of Stock That ...
  • Page 67
    ... 11/18/2011 2/8/2012 Stock Awards Equity incentive 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 unearned shares, units of Stock That ...
  • Page 68
    ... and Stock Vested The table below shows the number of shares of YUM common stock acquired during 2012 upon exercise of stock options ... 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
    ... accumulated benefits payable to each of the Named Executive Officers, including the number of years of service credited to each such Named Executive ... 2012 FISCAL YEAR PENSION BENEFITS TABLE Number of Years of Present Value of Payments During Credited Service Accumulated Benefit(4) Last ...
  • Page 70
    ...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 ... under the same terms and conditions as the Retirement Plan without regard to Internal Revenue Service limitations on amounts ...
  • Page 71
    ...a participant may only elect to invest into the YUM! Matching Stock Fund at the time the annual incentive deferral election is made. In ... and YUM! Matching Stock Fund are only distributed in shares of Company stock. Distributions under LRP. Under the LRP, participants receive a distribution of their ...
  • Page 72
    ...the case of the following amounts distributed to pay payroll taxes due upon their account balance under the EID Program or ...executive which has previously been reported as compensation to the executive in the Company's Summary Compensation Table for 2012 and prior years or would have been reported as...
  • Page 73
    ... may be different. Factors that could affect these amounts include the timing during the year of any such event, the Company's stock price and the executive's age. Stock Options and SAR Awards. If one or more Named Executive Officers ...
  • Page 74
    ... the Company's EID Program held by the executive will automatically vest. • All PSU awards under the Company's Performance Share Plan awarded in the year in which the change in control occurs will be paid out at target assuming a target level performance...
  • Page 75
    ...8,410,000 $ 4,932,000 $ 3,720,076 Annual Incentive 4,584,320 760,760 ...and immediately vest if the executive is employed on the date of the change in control of the Company and is is involuntarily terminated (other than by the Company for cause) on or within two years following the change in control ...
  • Page 76
    ... respect to $150,000 worth of YUM common stock ("face value") with an exercise price equal to the fair market value of Company stock on the date of grant. Directors may request to receive up to one-half of their stock retainer in cash. ...
  • Page 77
    ...1997 Plan"), SharePower Plan and Restaurant General Manager Stock Option Plan ("RGM Plan"). Number of Number of Securities Securities To ... and align the interest of employees and directors with those of our shareholders. The 1999 Plan is administered by the Management Planning and ...
  • Page 78
    ...the issuance of up to 28,000,000 shares of stock. The SharePower Plan allows us to award non-qualified stock options, SARs,...the RGM Plan. The purpose of the RGM Plan is (i) to give restaurant general managers ("RGMs") the opportunity to become owners of stock, (ii) to align the interests of RGMs ...
  • Page 79
    ...amended and restated effective November 16, 2012. The charter is reviewed by management at least annually, and any recommended changes ...connection with issues or concerns that arise throughout the year. Management is responsible for the Company's financial reporting process, including its system ...
  • Page 80
    ... statements, the Committee reviews and discusses with both management and the Company's independent auditors all annual and quarterly ... include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2012 for filing ...
  • Page 81
    ... instead of receiving copies through the mail. We are offering this service to provide shareholders with added ... Account Access, log in and locate the option to receive Company mailing via e-mail. ...and, if applicable, this proxy statement and Annual Report, to multiple shareholders sharing an address ...
  • Page 82
    ... in our proxy statement and proxy card for presentation at our 2014 Annual Meeting of Shareholders, the proposal must be received by us at our principal executive offices ... the date of this year's Annual Meeting, then the nomination or item of business must be received Proxy Statement by ...
  • Page 83
    ... (as determined in accordance with subsection 2.5), value equal to (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 ...
  • Page 84
    ...'s death, disability, retirement, change in control or involuntary termination). Awards to Directors may vest ...; earnings per share; market value added or economic value added; profits; ... on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant ...
  • Page 85
    ... Awards) shall be counted as covering two shares of Stock, and shall reduce the number ... the maximum number of shares of Stock available for delivery under the Plan. If the exercise price...¬ed by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number...
  • Page 86
    ...ii) (iii) the number and type of Shares (or other property) subject to outstanding Awards; the grant... other provision of the Plan, the Company shall have no liability to deliver any shares... owns, or through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan...
  • Page 87
    ... a business or entity, all or a portion of which is acquired by the Company or a Subsidiary). Subject to the overall limitation on the number of shares of Stock that may be delivered under the Plan, the Committee may use available shares of Stock as the form ...
  • Page 88
    ... Individuals those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other ...
  • 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
    ... Performance Unit Awards, and Performance Share Awards. Board. The term "Board" shall mean the Board of Directors of the Company. Change in Control....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...
  • Page 91
    ...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. - 2013 Proxy Statement A-9
  • Page 92
    ... ACT: Title of each class Common Stock, no par value Name of Each 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
    ...Operations...15 Quantitative and Qualitative Disclosures About Market Risk ...35 Financial Statements and Supplementary Data ...36 Changes In and Disagreements with Accountants on Accounting... Fees and Services ...72 PART IV ITEM 15 73 Exhibits and Financial Statement Schedules...73...
  • Page 94
    ... risks and uncertainties described in the Risk Factors included in Part 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 II, Item 7 of ...
  • Page 95
    ... China Division, based in Shanghai, China, comprises approximately 5,700 system restaurants, primarily Company-owned KFCs and Pizza Huts. In 2012, the China Division recorded revenues of approximately $6.9 billion and Operating Profit of ...
  • Page 96
    ... of the India units are Company-owned. • As of year end 2012, Taco Bell was the leader in the U.S. Mexican ...and 1 percent of the India units are Company-owned. • Pizza Hut operates in the delivery and casual.... Many Pizza Huts also offer pasta Supply and Distribution The Company's Concepts...
  • Page 97
    ... the exclusive distributor for the majority of items used in Company-owned restaurants and for a substantial number of franchisee and licensee stores. The ... to distribution to Company-owned restaurants. This agreement extends through December 31, 2016 and generally restricts Company-...
  • Page 98
    ..., state, local and international regulation of our business. Employees As of year end 2012, the Company and its Concepts employed approximately 523,...in Part II, Item 7, pages 15 through 34; and in the related Consolidated Financial Statements in Part II, Item 8, pages 36 through 70. (D) Available ...
  • Page 99
    ... in gasoline prices could also result in a decrease of customer traffic at our restaurants or the imposition ...and delivery of food and other supplies may increase costs or reduce revenues. The products... presence in existing markets. Form 10-K Our operating results are closely tied to the success...
  • Page 100
    ... 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 program will depend ...
  • Page 101
    ... products, new product development, advertising levels and promotional initiatives, customer service, reputation, restaurant location, and attractiveness and maintenance of ... could also require us to pay higher wages to attract a sufficient number of employees, which could ...
  • Page 102
    ... corporate headquarters and a research facility in Plano, Texas are owned by Pizza Hut. Taco Bell leases its corporate headquarters and research facility in ... initial terms of 15 or 20 years and generally have renewal options; however, Pizza Hut delivery/ ITEM 3 Legal Proceedings condition or cash ...
  • Page 103
    ...cer - Designate of YUM from January 2008 until April 2008. From 2000 until January 2008, he was Senior Vice President/Managing Director of YUM Restaurants International South Pacific. Patrick Grismer, 51, is Chief Financial Officer of...
  • Page 104
    ... Exchange ("NYSE"). The following sets forth the high and low NYSE composite closing sale prices by quarter for the Company's Common Stock and dividends per common share. $ 2011 Quarter First Second Third Fourth Form 10-K High 52.85 ...
  • Page 105
    ... respect to shares of Common Stock repurchased by the Company during the quarter then ended: Total number ...478 4,118 $ $ Total number of shares purchased as part of publicly announced plans or programs (thousands)... Common Stock. On November 16, 2012, our Board of Directors authorized additional share ...
  • Page 106
    ... Stock Balance Sheet Total assets Long-term debt Total debt Other Data Number of stores at year end Company Unconsolidated Affiliates ...U.S. 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...
  • Page 107
    ... except for non-company-owned restaurants for which we do not receive a sales-based ... license fees for the Company (typically at a rate of 4% to 6% of sales). Franchise, unconsolidated affiliate and license restaurant ... and 2010. The Company's primary restaurant brands - KFC, Pizza Hut and Taco Bell -...
  • Page 108
    ... population of 1.3 billion in mainland China, the Company is rapidly adding KFC and Pizza Hut Casual Dining restaurants and testing the additional restaurant concepts of Pizza Hut Home Service (pizza delivery) and East Dawning (Chinese food). Additionally, on February ...
  • Page 109
    ...22 20 13 35 18 21 14 23 15 13 14 Company sales Franchise ...RATE EFFECTIVE TAX RATE BEFORE SPECIAL ITEMS (a) See Note 3 for the number of shares used in these calculations.... (Expense) includes the depreciation reductions from Pizza Hut UK and KFC U.S. restaurants impaired upon our decision or offer to ...
  • 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. ... a result of settlement payments exceeding the sum of service and interest costs within the Plan in 2012, pursuant to our policy, we recorded a ...
  • Page 111
    ... refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores ... our decision to refranchise or close all of our remaining company-owned Pizza Hut UK dine-in restaurants, primarily to ...
  • Page 112
    ... 2011 and December 25, 2010, respectively. Additionally, in December 2012 we refranchised 331 remaining Company-owned dine-in restaurants in the Pizza Hut UK business and during 2010, we refranchised all Companyowned KFCs and Pizza ...
  • Page 113
    ...impact of refranchising on Total revenues as described above: 2012 Decreased Company sales Increased Franchise and license fees ...1 Internal Revenue Service Proposed Adjustments On June 23, 2010, the Company received a Revenue Agent Report (RAR) from the Internal Revenue Service (the "IRS") relating ...
  • Page 114
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Restaurant Unit Activity Worldwide Balance at end of 2010 New Builds Acquisitions Refranchising Closures LJS & A&W Divestitures(b) Other Balance at end of 2011 New Builds Acquisitions(c) ...
  • Page 115
    ... China, we have excluded from the Worldwide and China totals 7 Company-owned units that are similar to licensed units. There are no licensed units in India....units excluded offer limited menus and operate in nontraditional locations like malls, airports, gasoline service stations, ...
  • Page 116
    ... impact for Worldwide system sales for the year to date ended December 29, 2012. Company-Operated Store Results The following ... in the prior year. The impact of refranchisings and store closures represent the actual Company sales or Restaurant profit for the periods in the prior year while the ...
  • Page 117
    ...profit were Company same-store sales growth of 4%, which was partially offset by wage rate ...290 12.4% $ $ In 2012, the increase in YRI Company sales and Restaurant profit associated with store ... Company same-store sales growth of 3%, which was offset by the combination of higher labor costs...
  • Page 118
    ...362 12.1% In 2012, the decrease in U.S. Company sales and Restaurant profit associated with store portfolio ... compensation costs. In 2011, the decrease in U.S. Company sales and Restaurant profit associated with store... closures and franchise same-store sales declines. Form 10-K General and...
  • Page 119
    ...higher franchise-related rent expense and depreciation as a result of refranchising and 2011 bi-annual franchise convention costs. U.S. Franchise and license expenses for 2012 were positively impacted by 15% due to the LJS and A&W ...
  • Page 120
    ...2010 755 592 668 (3) 9 (194) - 5 (63) $ 1,769 18.3% 19.5% 16.2% 2012 12 6 13 NM 14 (22) NM NM NM 26 (1.6) ppts....2011. The decrease was driven by higher restaurant operating costs, higher franchise and license expenses and same-store sales declines, partially offset by lower G&A expenses. Unallocated ...
  • Page 121
    ... tax credits. The favorable impact is primarily attributable to a majority of our income being earned outside of the U.S. where tax rates are generally lower than the U.S. rate. In 2012, this benefit was negatively impacted by the repatriation of current ...
  • Page 122
    ...a one-level downgrade in our ratings. During the year ended December 29, 2012, we paid cash dividends...of $0.335 per share of Common Stock to be distributed on February 1, 2013 to shareholders of record at the close of business on January 11, 2013. The Company targets an ongoing annual dividend payout...
  • Page 123
    ... no net cash outï¬,ow. We sponsor noncontributory defined benefit pension plans covering certain salaried and hourly employees, the most significant of which are in the U.S. and UK. The most significant of these plans,...
  • Page 124
    ... aligned based on geography), our India Division and our China Division brands. We may elect to perform a qualitative .... The Company believes consistency in royalty rates as a percentage of sales is appropriate as the Company and franchisee share in the impact of near-term ï¬,uctuations in sales ...
  • Page 125
    ... units) and $7 million in goodwill was written off (representing 5% of beginning-of-year goodwill). Within our Pizza Hut U.K. business unit, 359 dine-in and delivery restaurants were refranchised (representing 86% of beginning-of-year company ...
  • Page 126
    ... and pre-vesting forfeitures. These groups consist of grants made primarily to restaurant-level employees under our Restaurant General Manager Stock Option Plan (the "RGM Plan") and grants made to executives under our other stock award ...
  • Page 127
    ...policies, we manage these risks through a variety of strategies, which may include the use ...29, 2012. Operating in international markets exposes the Company to movements in foreign currency exchange rates.... of market risk associated with commodity prices. Our ability to recover increased costs through...
  • 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
    PART II ITEM 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm The Board of ... in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall fi...
  • Page 130
    ...BASIC EARNINGS PER COMMON SHARE DILUTED EARNINGS PER COMMON SHARE DIVIDENDS DECLARED PER COMMON SHARE See accompanying Notes to Consolidated Financial Statements. Form 10-K $ $ $ $ 3,874 2,620 3,358 9,852 1,510 133 37 (78) (115) ...
  • Page 131
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Comprehensive Income ...unrealized losses arising during the year on pension and post-retirement plans Tax (expense).... See accompanying Notes to Consolidated Financial Statements. $ 2012 1,608 $ 2010 1,178 $ 27...
  • Page 132
    ... AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR See accompanying Notes to Consolidated Financial Statements. Form 10-K $ 40 YUM! BRANDS, INC. - 2012 Form 10-K
  • Page 133
    ... Liabilities Redeemable noncontrolling interest Shareholders' Equity Common Stock, no par value, 750 shares authorized; 451 shares ... LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY See accompanying Notes to Consolidated Financial Statements. $ $ 776 301 313 272 111 136 1,...
  • Page 134
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Shareholders' Equity ...Income Dividends declared Repurchase of shares of Common Stock Employee stock option and SARs ... AT DECEMBER 29, 2012 See accompanying Notes to Consolidated Financial Statements. Total $ 1,114...
  • Page 135
    ... ("China" or "China Division"), YUM Restaurants International ("YRI" or "International Division"), KFC U.S., Pizza Hut U.S., Taco Bell U.S., and YUM Restaurants India ("India" or ... "YUM" or the "Company") comprises primarily the worldwide operations of KFC, Pizza Hut and Taco Bell (...
  • Page 136
    ... the advertising cooperatives are required for both Company-owned and franchise restaurants and are generally based on a percent of restaurant sales. We ...other direct incremental franchise and license support costs. Revenue Recognition. Revenues from Company-owned restaurants are recognized ...
  • Page 137
    PART II ITEM 8 Financial Statements and Supplementary Data costs which will generally be used for the first...stock 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 date of grant....
  • Page 138
    ... 8 Financial Statements and Supplementary Data leases as a condition to the refranchising of certain Company restaurants...., we determine fair value based upon the quoted market price, if available.... over the estimated useful lives of the assets as follows: 5 to 25 years for buildings and improvements...
  • Page 139
    PART II ITEM 8 Financial Statements and Supplementary Data We expense rent associated with leased land or ... adjustments are made if such franchise agreement includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can include ...
  • Page 140
    ... instances, on a period basis, we record the cost of any further share repurchases 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 years, our ...
  • Page 141
    ...acquisition, which is based on the Little Sheep traded share price immediately subsequent to our offer to purchase the additional interest. Under the ...of acquisition, at fair value based on Little Sheep's traded share price immediately prior to our offer to purchase the business and recognized a non-...
  • Page 142
    ... refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores ... our decision to refranchise or close all of our remaining company-owned Pizza Hut UK dine-in restaurants, primarily to ...
  • Page 143
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes the 2012 and 2011 activity related to reserves ... Other prepaid expenses and current assets (a) Primarily reflects restaurants we have offered for sale to franchisees. $ YUM! BRANDS, INC. - 2012 Form 10-K 51
  • Page 144
    PART II ITEM 8 Financial Statements and Supplementary Data Property, Plant and Equipment Land Buildings and improvements Capital leases, ... $629 million, $599 million and $565 million in 2012, 2011 and 2010, respectively. Accounts Payable and Other Current Liabilities Accounts payable ...
  • Page 145
    PART II ITEM 8 Financial Statements and Supplementary Data Intangible assets, net for the years ended 2012 and 2011 are as follows: ... (See Note 12) LONG-TERM DEBT INCLUDING HEDGE ACCOUNTING ADJUSTMENT In 2012, the Company executed a five-year syndicated senior unsecured revolving ...
  • Page 146
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes...-annually thereafter. (b) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs... and fair value hedge accounting adjustments of $22 million, are as follows: Year ended...
  • Page 147
    ... Company is exposed 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...
  • Page 148
    ... was more likely than not a restaurant or restaurant group would be refranchised. 2012 Pizza Hut UK refranchising impairment (Level 3)(a) $ Little Sheep acquisition ... defined benefit pension plans covering certain full-time salaried and hourly U.S. employees. The most...
  • Page 149
    ...scal year ends. U.S. Pension Plans 2012 Change in benefit obligation Benefit obligation at beginning of year Service cost Interest cost Participant contributions Plan ... 2011 - (14) (369) (383) $ Form 10-K $ Actuarial net loss Prior service cost $ $ U.S. Pension Plans 2012 421 $ 7 428 $...
  • Page 150
    PART II ITEM 8 Financial Statements and Supplementary Data Information for pension plans with an accumulated ... any plans. Components of net periodic benefit cost: Net periodic benefit cost Service ... exceeding the sum of the service cost and interest cost for each plan during the year. See ...
  • Page 151
    ... of compensation increase Weighted-average assumptions used to determine the net periodic benefit cost for fiscal years: U.S. Pension Plans 2011 5.90% 7.75%... up 81% of total pension plan assets at the 2012 measurement date, are to reduce interest rate and market risk and to provide adequate ...
  • 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 ...includes the performance condition period. Form 10-K Potential awards to employees under SharePower include stock options, SARs...
  • Page 153
    ... requisite service period which includes the vesting period. Historically, the Company has repurchased shares on the open market in excess of the amount necessary to satisfy award exercises...our restaurant-level employees and our executives exercised the awards on average after 5 years ...
  • Page 154
    PART II ITEM 8 Financial Statements and Supplementary Data Impact on Net Income The components of share-based compensation expense and the related... dates subsequent to the 2010 fiscal year. Form 10-K On November 16, 2012, our Board of Directors authorized share repurchases through May 2014 of up ...
  • Page 155
    ... tax credits. The favorable impact is primarily attributable to a majority of our income being earned outside of the U.S. where tax rates are generally lower than the U.S. rate. In 2012, this benefit was negatively impacted by the repatriation of current ...
  • Page 156
    PART II ITEM 8 Financial Statements and Supplementary Data The details of 2012 and 2011 deferred tax ... losses and tax credit carryforwards Employee benefits Share-based compensation Self-insured .... Each of these positions is individually insignificant. 64 YUM! BRANDS, INC. - 2012 Form 10-K
  • Page 157
    ...of our international operations. We consider our KFC, Pizza Hut and Taco Bell operating segments in the U.S. to be similar and therefore have aggregated ... $ We are principally engaged in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco Bell concepts. KFC, Pizza ...
  • 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 expenses(a)(d) ... Corporate(i) $ $ 2010 2,289 2,606 2,398 43 980 8,316 Form 10-K 66 YUM! BRANDS, INC. - 2012 Form 10-K
  • Page 159
    PART II ITEM 8 Financial Statements and Supplementary Data China YRI U.S. India Corporate $ $ Long-Lived ..., $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 million ...
  • Page 160
    ... and the consolidated case is styled In Re Taco Bell Wage and Hour Actions. The In Re Taco Bell Wage and... the class of people who use wheelchairs or scooters for mobility by failing to make its approximately 200 Company-owned restaurants in California accessible to the class. Plaintiffs contend that ...
  • Page 161
    ... alleged that Pizza Hut did not properly reimburse its delivery drivers for various automobile costs, ...opt-ins. The final number has yet to be determined but is expected to be approximately 6,000. Pizza Hut ..., of salaried assistant managers who were allegedly misclassified and did not receive ...
  • Page 162
    ... Quarter Second Quarter Revenues: Company sales Franchise and license fees and income Total revenues Restaurant profit Operating Pron.. 53rd week in 2011. See Note 4 for further discussion. Management's Responsibility for Financial Statements Form 10-K To Our Shareholders: We are responsible for ...
  • Page 163
    ... an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and ... financial reporting and has issued their report, included herein. Form 10-K Changes in Internal Control There ...
  • 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
    ...reference from Exhibit 10.7 to YUM's Annual Report on Form 10-K for the fiscal year ended December ...reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended December ...¬nitive Proxy Statement on Form DEF 14A for the Annual Meeting of Shareholders held on May...
  • Page 168
    ...Purchasing Co-op, LLC, as filed herewith. YUM Restaurant General Manager Stock Option Plan, as effective April 1, 1999, and as amended through June 23, 2003,...-K for the fiscal year ended December 31, 2005. Form of YUM Director Stock Option Award Agreement, which is...
  • Page 169
    ...cate • Retrieve a duplicate Form 1099-B • Purchase shares of YUM through the Company's Direct Stock Purchase Plan • Sell ... all questions regarding their accounts, outstanding options/stock appreciation rights or shares received through option/stock appreciation ...
  • Page 170
    Shareholder Services DIRECT STOCK PURCHASE PLAN A prospectus and a brochure explaining this convenient plan... Exchange is the principal market for YUM Common Stock, which trades under the symbol YUM. Franchise ... Yum! Brands' Annual Report contains many of the valuable trademarks owned and used by Yum!...
  • Page 171
    ...-Chief Executive Officer, JP 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, Inc. David W. Dorman 59 Non-Executive Chairman, CVS Caremark...
  • 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.


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  • 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
    ... for per share amounts) Year-end 2012 2011 % B/(W) change Company sales Total revenues Operating Profit Net ... Brands Everywhere...5-6 Improving U.S. Brand Positions...7-8 Driving Long-Term Shareholder Value...9 Company with a Huge Heart...10 ABOUT THE PAPER USED FOR THIS REPORT The inks ...
  • Pizza Hut 2012 Annual Report - Page 3
    ... 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%..., we are extremely proud that our five year average annual shareholder return, including stock appreciation and dividend reinvestment, is 14%...
  • Pizza Hut 2012 Annual Report - Page 4
    ... This meeting gives us the opportunity to "go public" with our goals and commitments as well as showcase our management talent from around the ... to a growing confidence in our business model. restaurants around the world. Over 39,000 Building sales layers and expanding day...
  • 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 ... new cities and increase its penetration levels in existing markets. At 826 units, Pizza Hut Casual Dining is the leader in its ...
  • Pizza Hut 2012 Annual Report - Page 6
    ... Hut Casual Dining. We will also continue to invest behind Pizza Hut Home Service, Little Sheep and East Dawning. Our new unit target of at least 700 remains unchanged for 2013. Pizza Hut Casual Dining restaurants in China. 826 China is the #1 retail growth opportunity in the world. As...
  • Pizza Hut 2012 Annual Report - Page 7
    ... people in the top 10 emerging markets, compared to 58 restaurants per million in the U.S. In 2012, Yum! Restaurants International (YRI) which includes all countries outside the U.S., China and...record 949 new units, with 65% of them in emerging markets. It's clear we are a leader in emerging ...
  • Pizza Hut 2012 Annual Report - Page 8
    innovative experiences with KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and Taco Bell. We will invest behind building each of these brands in India and expect all of them to drive tremendous future growth. We are on our way to making this business ...
  • Pizza Hut 2012 Annual Report - Page 9
    ...headway 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...
  • Pizza Hut 2012 Annual Report - Page 10
    ... everyday $10 large pizza offers. Given its sales and unit margin success, Pizza Hut stepped up new ... and were net-unit positive for the year. We added 150 net new units at Pizza Hut and over ... of negative same-store sales growth. go from about 5,000 to 8,000 units and Pizza Hut to expand ...
  • Pizza Hut 2012 Annual Report - Page 11
    4 Drive industry-leading, long-term shareholder and franchisee value. penetrated markets like Pizza Hut UK and increasing our exposure ...Turkey, a highgrowth emerging market that has over 100 KFC and Pizza Hut restaurants. Our success executing our strategies has driven our Return...
  • Pizza Hut 2012 Annual Report - Page 12
    ... COURSE is great news for 2013 and beyond. 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 and drive our growth around the world....
  • Pizza Hut 2012 Annual Report - Page 13
    ... everywhere with one system operational excellence as our foundation Make 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 doors and...
  • Pizza Hut 2012 Annual Report - Page 14
    ... improve U.S. brand positions, consistency and returns Drive industryleading, long-term shareholder and franchisee value Believe in All People Be Restaurant and Customer Maniacs...NOW! Recognize! Recognize! Recognize! how we win ...
  • Pizza Hut 2012 Annual Report - Page 15
    ...your Board of Directors, we are pleased to invite you to attend the 2013 Annual Meeting of Shareholders ...your shares via a toll-free telephone number or over the Internet. If you received ... the proxy statement are available at www.yum.com/investors/investor_materials. asp. The Annual Report on Form 10...
  • Pizza Hut 2012 Annual Report - Page 16
  • Pizza Hut 2012 Annual Report - Page 17
    ... 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...proxy statement and the form of proxy are first being mailed to shareholders on or about April 5, 2013. By Order of the Board of Directors Christian ...
  • Pizza Hut 2012 Annual Report - Page 18
    ... SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE EXECUTIVE COMPENSATION 27 29 30 Compensation Discussion and Analysis ...30 Management Planning and Development Committee Report ...43 Summary Compensation Table ...44 All Other ...
  • Pizza Hut 2012 Annual Report - Page 19
    YUM! BRANDS, INC. 1441 Gardiner Lane Louisville, Kentucky 40213 PROXY STATEMENT For Annual Meeting of Shareholders To Be Held On May 15, 2013 The Board of Directors (the "Board of Directors" or the "Board") of YUM! Brands, Inc., a North Carolina corporation ("YUM...
  • Pizza Hut 2012 Annual Report - Page 20
    ... will be your admission ticket. If you received the proxy statement and Annual Report by mail, you will find an ...of the Company will answer shareholders' questions of general interest following the Annual Meeting. In order to give a greater number of shareholders an opportunity to ask questions, ...
  • Pizza Hut 2012 Annual Report - Page 21
    ..., you may vote those shares telephonically by calling the telephone number shown on the voting instruction form received from your ... Eastern Daylight Saving Time, on May 14, 2013. Proxy Statement Can I vote at the Annual Meeting? Shares registered directly in your name as the shareholder of record ...
  • Pizza Hut 2012 Annual Report - Page 22
    ... authority under the New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on ... director nominees named in this proxy statement. In an uncontested election, a nominee will be elected as a director if the number of "FOR" votes exceeds the ...
  • Pizza Hut 2012 Annual Report - Page 23
    ... the voting results? The Company will announce the voting results of the Annual Meeting on a Current Report on Form 8-K filed within four .... If any other matters properly come before the Annual Meeting and call for a vote of shareholders, validly executed proxies in the enclosed form returned to ...
  • 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.... The Board believes that its practices align management and shareholder interests. The corporate governance section of the Company website makes available the ...
  • Pizza Hut 2012 Annual Report - Page 25
    ... Company. Mr. Novak's combined role as Chairman and CEO also ensures that the Company presents its message and strategy to shareholders, employees, customers, franchisees and business partners with a unified voice. Combining the Chairman ...
  • Pizza Hut 2012 Annual Report - Page 26
    .... Proxy Statement What other significant Board practices does the Company have? • Private Executive Sessions. Our non-management directors meet in executive session at each regular Board meeting. The executive sessions are attended only by...
  • Pizza Hut 2012 Annual Report - Page 27
    ... performance, customer satisfaction and shareholder return, emphasize long-term incentives and require executives to personally invest in Company stock. In 2013, the Management Planning and Development Committee of the Board of Directors ...
  • Pizza Hut 2012 Annual Report - Page 28
    ... concerns regarding accounting and other matters in 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 of our people, with ...
  • Pizza Hut 2012 Annual Report - Page 29
    ...Reviews the annual audited financial statements and results of the audit with management and the independent auditors • Reviews the Company's accounting and financial reporting principles and practices including any significant...
  • Pizza Hut 2012 Annual Report - Page 30
    ..., the Company requires stock ownership by directors. The Board of Directors expects non-management directors to hold a meaningful number of shares of Company common stock and expects non-management directors to retain shares acquired as compensation as a ...
  • 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
    ... and distribution business • Expertise in branding, marketing, sales and international business development • Public company directorship and committee ... 2011. From October 2006 to May 2008, he was Senior Advisor and Managing Director to Warburg Pincus, a global private equity firm. ...
  • 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 ... 2006. Thomas C. Nelson Age 50 Director since 2006 Chairman, Chief Executive Officer and President,...
  • Pizza Hut 2012 Annual Report - Page 34
    ... President and Chief Executive Officer, KFC and Pizza Hut from August 1996 to... Prior to this position, he was the Vice President of North Asia for both KFC and Pizza Hut....Operating and management experience, including as president of the Company's China Division • Expertise in marketing and ...
  • Pizza Hut 2012 Annual Report - Page 35
    ... aforementioned nominees will serve as directors and hold office until the 2014 Annual Meeting of Shareholders and until their respective successors ...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 ...
  • Pizza Hut 2012 Annual Report - Page 36
    ...$ 7,670,000 $ (1) Audit fees include fees for the audit of the annual consolidated financial statements, reviews of the interim condensed consolidated financial statements included in the Company's quarterly reports, audits of the effectiveness of the...
  • Pizza Hut 2012 Annual Report - Page 37
    ...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 and short term...
  • Pizza Hut 2012 Annual Report - Page 38
    ...units (from approximately 90% stock appreciation rights and 10% performance share plan units in 2012); • Eliminating... and non-binding on the Company, the Board of Directors and the Management Planning and Development Committee will review the voting results and consider shareholder concerns in ...
  • Pizza Hut 2012 Annual Report - Page 39
    ... individuals those persons who shall receive awards, to determine the time or times of receipt, to determine the types of awards and the number of shares covered by the awards, to establish the terms, conditions, performance criteria, restrictions, and other ...
  • Pizza Hut 2012 Annual Report - Page 40
    ... independent of any option grant. A SAR entitles the 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 Committee. The exercise price ...
  • Pizza Hut 2012 Annual Report - Page 41
    ... the LTIP is satisfied by tendering shares of stock to the Company (by either actual delivery or by attestation), only the number of shares of stock ... equal to the excess of the fair market value of the stock acquired over the exercise price for those shares, and the Company will be entitled to a...
  • Pizza Hut 2012 Annual Report - Page 42
    ... capital gains and losses, with the basis in such stock equal to the fair market value of the shares at the time of exercise. • INCENTIVE STOCK OPTIONS. The... to the amount of cash received and the then fair market value of the distributed shares. The Company will be entitled to a corresponding ...
  • Pizza Hut 2012 Annual Report - Page 43
    ... intends to present the following shareholder proposal at the Annual Meeting. We will furnish the address and share ownership of the proponent ... prepare a report by September 1, 2013 on the company's efforts to implement this strategy. The report, to be prepared at reasonable cost, may omit confi...
  • Pizza Hut 2012 Annual Report - Page 44
    ITEM 5 SHAREHOLDER PROPOSAL REGARDING PACKAGING RECYCLING Management Statement in Opposition to Shareholder Proposal What is the Company's position regarding this proposal? The Board of Directors recommends that shareholders vote AGAINST this ...
  • Pizza Hut 2012 Annual Report - Page 45
    ... common stock or stock equivalents within five years following their appointment to their current position. The table shows the number of shares of common stock and common stock equivalents beneficially owned as of December 31, 2012. ...
  • Pizza Hut 2012 Annual Report - Page 46
    ... T. Carucci Muktesh Pant 9,529 334,372 7,782 351,683 89,458 441,141 All Directors and Executive Officers as a Group ...of SARs multiplied by the difference between the fair market value of our common stock at year-end and the exercise price divided by the fair market value of the stock). (3) These ...
  • Pizza Hut 2012 Annual Report - Page 47
    ... Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of the outstanding shares of ... in their ownership of YUM common stock. Directors, executive officers and greater-than-ten percent shareholders are also required to furnish YUM with ...
  • Pizza Hut 2012 Annual Report - Page 48
    ... year as our total shareholder return during the 2012 calendar year was 15%. Relationship Between Company Pay and Performance Our compensation..., we highlighted four major growth strategies we have communicated to investors for several years: • Build leading brands in China in every signifi...
  • Pizza Hut 2012 Annual Report - Page 49
    ... ("TSR") over the past ten years. EARNINGS PER SHARE* - TEN YEAR GROWTH +534% Total Shareholder Return 17% 15% 14% 13% 13%... shareholders but our superior relative results suggests we are exceeding shareholder expectations compared to the market generally. YUM! BRANDS, INC. - 2013 Proxy Statement 31
  • Pizza Hut 2012 Annual Report - Page 50
    EXECUTIVE COMPENSATION TOTAL SHAREHOLDER RETURN ONE-YEAR PERIOD ENDING DECEMBER 31, 2012 16% 15% 13% THREE-YEAR PERIOD ENDING DECEMBER ... base salary, bonus paid and annual long-term incentive award value has remained relatively ï¬,at from 2009-2012. Since the beginning of ...
  • Pizza Hut 2012 Annual Report - Page 51
    ... invest in Company stock Key Elements of Our Executive Compensation Program • Pay for Performance... with those of shareholders by encouraging executives to grow the value of the Company. • Strong Stock Ownership Guidelines... have always required our Named Executive Officers (and top 600...
  • Pizza Hut 2012 Annual Report - Page 52
    ... gross-ups upon change in control • No hedging or pledging of Company stock • No inclusion of the value of equity awards in pension calculations • No tax gross-... MIX-2012 ALL OTHER NAMED EXECUTIVE OFFICERS TARGET PAY MIX-2012 21% Proxy Statement 13% 21% 58%...
  • Pizza Hut 2012 Annual Report - Page 53
    ... talent. 2010 Revenues Company Name Kimberly-Clark Corporation Kraft Foods Inc.... correlates with the market value of compensation for senior executive positions. For companies with significant franchise..., managing product introductions, marketing, driving new unit development, and driving customer...
  • Pizza Hut 2012 Annual Report - Page 54
    .... For the Chief Executive Officer, the Company generally attempts to deliver pay at the 75th percentile of the market if he and the Company... an allocation to his pension account equal to 9.5% of his salary and target bonus and will receive an annual interest allocation on ...
  • Pizza Hut 2012 Annual Report - Page 55
    ... performance targets were developed through the Company's annual financial planning process, which takes into account division growth strategies,...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 level ...
  • Pizza Hut 2012 Annual Report - Page 56
    ...2012. (2) Actual operating profit growth was 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 of the 53rd week and the divestiture of LJS/A&W in...
  • Pizza Hut 2012 Annual Report - Page 57
    ... determination was based upon his leadership of the Taco Bell, Pizza Hut and KFC US Divisions and Yum! Restaurants International Division along with the ... profit growth, system sales growth and customer satisfaction targets. Proxy Statement Long-Term Equity Performance-Based ...
  • Pizza Hut 2012 Annual Report - Page 58
    ... 2012 can be earned based on a 3-year EPS growth over the period 20122014. The target, threshold and maximum shares that may be paid ... qualified plan designed to provide a retirement income based on years of service with the Company and average annual earnings. In addition, the YUM! Brands, Inc. ...
  • Pizza Hut 2012 Annual Report - Page 59
    .... This is an unfunded, unsecured account-based retirement plan which allocates a percentage of pay to an account payable to the executive following the later to occur of the executive's retirement from the Company or attainment of age 65. For ...
  • Pizza Hut 2012 Annual Report - Page 60
    ... No Named Executive Officers received Chairman's Award grants during 2012. Management ... Committee sets all the terms of each award, except the actual number of stock appreciation rights ... employment; and (b) the highest annual bonus awarded to the Named Executive Officer by the Company in any ...
  • Pizza Hut 2012 Annual Report - Page 61
    .... Hedging and Pledging of Company Stock Under our Code of Conduct, no employee... from, or profit from, a decline in the Company stock price. Similarly, no employee or director may enter... Report The Management Planning and Development Committee of the Board of Directors reports that it has reviewed...
  • Pizza Hut 2012 Annual Report - Page 62
    EXECUTIVE COMPENSATION The following tables provide information on the compensation of the Named Executive Officers for our 2012 fiscal year. The Company's Named Executive Officers are our Chief Executive Officer, Chief Financial Officer ...
  • Pizza Hut 2012 Annual Report - Page 63
    ... contained in Part II, Item 8, "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." (4) Except as provided below and...
  • Pizza Hut 2012 Annual Report - Page 64
    ... fees, "dead head" costs of flying planes to and from locations for personal use, and contract labor... Kong tax rate. (3) These amounts reflect the income each executive was deemed to receive from IRS tables...preparation assistance. For Mr. Grismer and Mr. Pant, this column also includes Company annual ...
  • Pizza Hut 2012 Annual Report - Page 65
    ...the 10% growth target is achieved, 100% of the PSUs will pay out in shares of Company stock. If less than 7% compounded EPS ..."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
    ...,898 605,966 - - Stock Awards Equity incentive 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 unearned shares, units of Stock That ...
  • Pizza Hut 2012 Annual Report - Page 67
    ... 11/18/2011 2/8/2012 Stock Awards Equity incentive 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 unearned shares, units of Stock That ...
  • Pizza Hut 2012 Annual Report - Page 68
    ... and Stock Vested The table below shows the number of shares of YUM common stock acquired during 2012 upon exercise of stock options ... 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
    ... accumulated benefits payable to each of the Named Executive Officers, including the number of years of service credited to each such Named Executive ... 2012 FISCAL YEAR PENSION BENEFITS TABLE Number of Years of Present Value of Payments During Credited Service Accumulated Benefit(4) Last ...
  • Pizza Hut 2012 Annual Report - Page 70
    ...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 ... under the same terms and conditions as the Retirement Plan without regard to Internal Revenue Service limitations on amounts ...
  • Pizza Hut 2012 Annual Report - Page 71
    ...a participant may only elect to invest into the YUM! Matching Stock Fund at the time the annual incentive deferral election is made. In ... and YUM! Matching Stock Fund are only distributed in shares of Company stock. Distributions under LRP. Under the LRP, participants receive a distribution of their ...
  • Pizza Hut 2012 Annual Report - Page 72
    ...the case of the following amounts distributed to pay payroll taxes due upon their account balance under the EID Program or ...executive which has previously been reported as compensation to the executive in the Company's Summary Compensation Table for 2012 and prior years or would have been reported as...
  • Pizza Hut 2012 Annual Report - Page 73
    ... may be different. Factors that could affect these amounts include the timing during the year of any such event, the Company's stock price and the executive's age. Stock Options and SAR Awards. If one or more Named Executive Officers ...
  • Pizza Hut 2012 Annual Report - Page 74
    ... the Company's EID Program held by the executive will automatically vest. • All PSU awards under the Company's Performance Share Plan awarded in the year in which the change in control occurs will be paid out at target assuming a target level performance...
  • Pizza Hut 2012 Annual Report - Page 75
    ...8,410,000 $ 4,932,000 $ 3,720,076 Annual Incentive 4,584,320 760,760 ...and immediately vest if the executive is employed on the date of the change in control of the Company and is is involuntarily terminated (other than by the Company for cause) on or within two years following the change in control ...
  • Pizza Hut 2012 Annual Report - Page 76
    ... respect to $150,000 worth of YUM common stock ("face value") with an exercise price equal to the fair market value of Company stock on the date of grant. Directors may request to receive up to one-half of their stock retainer in cash. ...
  • Pizza Hut 2012 Annual Report - Page 77
    ...1997 Plan"), SharePower Plan and Restaurant General Manager Stock Option Plan ("RGM Plan"). Number of Number of Securities Securities To ... and align the interest of employees and directors with those of our shareholders. The 1999 Plan is administered by the Management Planning and ...
  • Pizza Hut 2012 Annual Report - Page 78
    ...the issuance of up to 28,000,000 shares of stock. The SharePower Plan allows us to award non-qualified stock options, SARs,...the RGM Plan. The purpose of the RGM Plan is (i) to give restaurant general managers ("RGMs") the opportunity to become owners of stock, (ii) to align the interests of RGMs ...
  • Pizza Hut 2012 Annual Report - Page 79
    ...amended and restated effective November 16, 2012. The charter is reviewed by management at least annually, and any recommended changes ...connection with issues or concerns that arise throughout the year. Management is responsible for the Company's financial reporting process, including its system ...
  • Pizza Hut 2012 Annual Report - Page 80
    ... statements, the Committee reviews and discusses with both management and the Company's independent auditors all annual and quarterly ... include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2012 for filing ...
  • Pizza Hut 2012 Annual Report - Page 81
    ... instead of receiving copies through the mail. We are offering this service to provide shareholders with added ... Account Access, log in and locate the option to receive Company mailing via e-mail. ...and, if applicable, this proxy statement and Annual Report, to multiple shareholders sharing an address ...
  • Pizza Hut 2012 Annual Report - Page 82
    ... in our proxy statement and proxy card for presentation at our 2014 Annual Meeting of Shareholders, the proposal must be received by us at our principal executive offices ... the date of this year's Annual Meeting, then the nomination or item of business must be received Proxy Statement by ...
  • Pizza Hut 2012 Annual Report - Page 83
    ... (as determined in accordance with subsection 2.5), value equal to (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 ...
  • Pizza Hut 2012 Annual Report - Page 84
    ...'s death, disability, retirement, change in control or involuntary termination). Awards to Directors may vest ...; earnings per share; market value added or economic value added; profits; ... on investment; revenues; stock price; total shareholder return; customer satisfaction metrics; or restaurant ...
  • Pizza Hut 2012 Annual Report - Page 85
    ... Awards) shall be counted as covering two shares of Stock, and shall reduce the number ... the maximum number of shares of Stock available for delivery under the Plan. If the exercise price...¬ed by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number...
  • Pizza Hut 2012 Annual Report - Page 86
    ...ii) (iii) the number and type of Shares (or other property) subject to outstanding Awards; the grant... other provision of the Plan, the Company shall have no liability to deliver any shares... owns, or through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan...
  • Pizza Hut 2012 Annual Report - Page 87
    ... a business or entity, all or a portion of which is acquired by the Company or a Subsidiary). Subject to the overall limitation on the number of shares of Stock that may be delivered under the Plan, the Committee may use available shares of Stock as the form ...
  • Pizza Hut 2012 Annual Report - Page 88
    ... Individuals those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other ...
  • 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
    ... Performance Unit Awards, and Performance Share Awards. Board. The term "Board" shall mean the Board of Directors of the Company. Change in Control....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...
  • Pizza Hut 2012 Annual Report - Page 91
    ...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. - 2013 Proxy Statement A-9
  • Pizza Hut 2012 Annual Report - Page 92
    ... ACT: Title of each class Common Stock, no par value Name of Each 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
    ...Operations...15 Quantitative and Qualitative Disclosures About Market Risk ...35 Financial Statements and Supplementary Data ...36 Changes In and Disagreements with Accountants on Accounting... Fees and Services ...72 PART IV ITEM 15 73 Exhibits and Financial Statement Schedules...73...
  • Pizza Hut 2012 Annual Report - Page 94
    ... risks and uncertainties described in the Risk Factors included in Part 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 II, Item 7 of ...
  • Pizza Hut 2012 Annual Report - Page 95
    ... China Division, based in Shanghai, China, comprises approximately 5,700 system restaurants, primarily Company-owned KFCs and Pizza Huts. In 2012, the China Division recorded revenues of approximately $6.9 billion and Operating Profit of ...
  • Pizza Hut 2012 Annual Report - Page 96
    ... of the India units are Company-owned. • As of year end 2012, Taco Bell was the leader in the U.S. Mexican ...and 1 percent of the India units are Company-owned. • Pizza Hut operates in the delivery and casual.... Many Pizza Huts also offer pasta Supply and Distribution The Company's Concepts...
  • Pizza Hut 2012 Annual Report - Page 97
    ... the exclusive distributor for the majority of items used in Company-owned restaurants and for a substantial number of franchisee and licensee stores. The ... to distribution to Company-owned restaurants. This agreement extends through December 31, 2016 and generally restricts Company-...
  • Pizza Hut 2012 Annual Report - Page 98
    ..., state, local and international regulation of our business. Employees As of year end 2012, the Company and its Concepts employed approximately 523,...in Part II, Item 7, pages 15 through 34; and in the related Consolidated Financial Statements in Part II, Item 8, pages 36 through 70. (D) Available ...
  • Pizza Hut 2012 Annual Report - Page 99
    ... in gasoline prices could also result in a decrease of customer traffic at our restaurants or the imposition ...and delivery of food and other supplies may increase costs or reduce revenues. The products... presence in existing markets. Form 10-K Our operating results are closely tied to the success...
  • Pizza Hut 2012 Annual Report - Page 100
    ... 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 program will depend ...
  • Pizza Hut 2012 Annual Report - Page 101
    ... products, new product development, advertising levels and promotional initiatives, customer service, reputation, restaurant location, and attractiveness and maintenance of ... could also require us to pay higher wages to attract a sufficient number of employees, which could ...
  • Pizza Hut 2012 Annual Report - Page 102
    ... corporate headquarters and a research facility in Plano, Texas are owned by Pizza Hut. Taco Bell leases its corporate headquarters and research facility in ... initial terms of 15 or 20 years and generally have renewal options; however, Pizza Hut delivery/ ITEM 3 Legal Proceedings condition or cash ...
  • Pizza Hut 2012 Annual Report - Page 103
    ...cer - Designate of YUM from January 2008 until April 2008. From 2000 until January 2008, he was Senior Vice President/Managing Director of YUM Restaurants International South Pacific. Patrick Grismer, 51, is Chief Financial Officer of...
  • Pizza Hut 2012 Annual Report - Page 104
    ... Exchange ("NYSE"). The following sets forth the high and low NYSE composite closing sale prices by quarter for the Company's Common Stock and dividends per common share. $ 2011 Quarter First Second Third Fourth Form 10-K High 52.85 ...
  • Pizza Hut 2012 Annual Report - Page 105
    ... respect to shares of Common Stock repurchased by the Company during the quarter then ended: Total number ...478 4,118 $ $ Total number of shares purchased as part of publicly announced plans or programs (thousands)... Common Stock. On November 16, 2012, our Board of Directors authorized additional share ...
  • Pizza Hut 2012 Annual Report - Page 106
    ... Stock Balance Sheet Total assets Long-term debt Total debt Other Data Number of stores at year end Company Unconsolidated Affiliates ...U.S. 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...
  • Pizza Hut 2012 Annual Report - Page 107
    ... except for non-company-owned restaurants for which we do not receive a sales-based ... license fees for the Company (typically at a rate of 4% to 6% of sales). Franchise, unconsolidated affiliate and license restaurant ... and 2010. The Company's primary restaurant brands - KFC, Pizza Hut and Taco Bell -...
  • Pizza Hut 2012 Annual Report - Page 108
    ... population of 1.3 billion in mainland China, the Company is rapidly adding KFC and Pizza Hut Casual Dining restaurants and testing the additional restaurant concepts of Pizza Hut Home Service (pizza delivery) and East Dawning (Chinese food). Additionally, on February ...
  • Pizza Hut 2012 Annual Report - Page 109
    ...22 20 13 35 18 21 14 23 15 13 14 Company sales Franchise ...RATE EFFECTIVE TAX RATE BEFORE SPECIAL ITEMS (a) See Note 3 for the number of shares used in these calculations.... (Expense) includes the depreciation reductions from Pizza Hut UK and KFC U.S. restaurants impaired upon our decision or offer to ...
  • 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. ... a result of settlement payments exceeding the sum of service and interest costs within the Plan in 2012, pursuant to our policy, we recorded a ...
  • Pizza Hut 2012 Annual Report - Page 111
    ... refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores ... our decision to refranchise or close all of our remaining company-owned Pizza Hut UK dine-in restaurants, primarily to ...
  • Pizza Hut 2012 Annual Report - Page 112
    ... 2011 and December 25, 2010, respectively. Additionally, in December 2012 we refranchised 331 remaining Company-owned dine-in restaurants in the Pizza Hut UK business and during 2010, we refranchised all Companyowned KFCs and Pizza ...
  • Pizza Hut 2012 Annual Report - Page 113
    ...impact of refranchising on Total revenues as described above: 2012 Decreased Company sales Increased Franchise and license fees ...1 Internal Revenue Service Proposed Adjustments On June 23, 2010, the Company received a Revenue Agent Report (RAR) from the Internal Revenue Service (the "IRS") relating ...
  • Pizza Hut 2012 Annual Report - Page 114
    PART II ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Restaurant Unit Activity Worldwide Balance at end of 2010 New Builds Acquisitions Refranchising Closures LJS & A&W Divestitures(b) Other Balance at end of 2011 New Builds Acquisitions(c) ...
  • Pizza Hut 2012 Annual Report - Page 115
    ... China, we have excluded from the Worldwide and China totals 7 Company-owned units that are similar to licensed units. There are no licensed units in India....units excluded offer limited menus and operate in nontraditional locations like malls, airports, gasoline service stations, ...
  • Pizza Hut 2012 Annual Report - Page 116
    ... impact for Worldwide system sales for the year to date ended December 29, 2012. Company-Operated Store Results The following ... in the prior year. The impact of refranchisings and store closures represent the actual Company sales or Restaurant profit for the periods in the prior year while the ...
  • Pizza Hut 2012 Annual Report - Page 117
    ...profit were Company same-store sales growth of 4%, which was partially offset by wage rate ...290 12.4% $ $ In 2012, the increase in YRI Company sales and Restaurant profit associated with store ... Company same-store sales growth of 3%, which was offset by the combination of higher labor costs...
  • Pizza Hut 2012 Annual Report - Page 118
    ...362 12.1% In 2012, the decrease in U.S. Company sales and Restaurant profit associated with store portfolio ... compensation costs. In 2011, the decrease in U.S. Company sales and Restaurant profit associated with store... closures and franchise same-store sales declines. Form 10-K General and...
  • Pizza Hut 2012 Annual Report - Page 119
    ...higher franchise-related rent expense and depreciation as a result of refranchising and 2011 bi-annual franchise convention costs. U.S. Franchise and license expenses for 2012 were positively impacted by 15% due to the LJS and A&W ...
  • Pizza Hut 2012 Annual Report - Page 120
    ...2010 755 592 668 (3) 9 (194) - 5 (63) $ 1,769 18.3% 19.5% 16.2% 2012 12 6 13 NM 14 (22) NM NM NM 26 (1.6) ppts....2011. The decrease was driven by higher restaurant operating costs, higher franchise and license expenses and same-store sales declines, partially offset by lower G&A expenses. Unallocated ...
  • Pizza Hut 2012 Annual Report - Page 121
    ... tax credits. The favorable impact is primarily attributable to a majority of our income being earned outside of the U.S. where tax rates are generally lower than the U.S. rate. In 2012, this benefit was negatively impacted by the repatriation of current ...
  • Pizza Hut 2012 Annual Report - Page 122
    ...a one-level downgrade in our ratings. During the year ended December 29, 2012, we paid cash dividends...of $0.335 per share of Common Stock to be distributed on February 1, 2013 to shareholders of record at the close of business on January 11, 2013. The Company targets an ongoing annual dividend payout...
  • Pizza Hut 2012 Annual Report - Page 123
    ... no net cash outï¬,ow. We sponsor noncontributory defined benefit pension plans covering certain salaried and hourly employees, the most significant of which are in the U.S. and UK. The most significant of these plans,...
  • Pizza Hut 2012 Annual Report - Page 124
    ... aligned based on geography), our India Division and our China Division brands. We may elect to perform a qualitative .... The Company believes consistency in royalty rates as a percentage of sales is appropriate as the Company and franchisee share in the impact of near-term ï¬,uctuations in sales ...
  • Pizza Hut 2012 Annual Report - Page 125
    ... units) and $7 million in goodwill was written off (representing 5% of beginning-of-year goodwill). Within our Pizza Hut U.K. business unit, 359 dine-in and delivery restaurants were refranchised (representing 86% of beginning-of-year company ...
  • Pizza Hut 2012 Annual Report - Page 126
    ... and pre-vesting forfeitures. These groups consist of grants made primarily to restaurant-level employees under our Restaurant General Manager Stock Option Plan (the "RGM Plan") and grants made to executives under our other stock award ...
  • Pizza Hut 2012 Annual Report - Page 127
    ...policies, we manage these risks through a variety of strategies, which may include the use ...29, 2012. Operating in international markets exposes the Company to movements in foreign currency exchange rates.... of market risk associated with commodity prices. Our ability to recover increased costs through...
  • 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
    PART II ITEM 8 Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm The Board of ... in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall fi...
  • Pizza Hut 2012 Annual Report - Page 130
    ...BASIC EARNINGS PER COMMON SHARE DILUTED EARNINGS PER COMMON SHARE DIVIDENDS DECLARED PER COMMON SHARE See accompanying Notes to Consolidated Financial Statements. Form 10-K $ $ $ $ 3,874 2,620 3,358 9,852 1,510 133 37 (78) (115) ...
  • Pizza Hut 2012 Annual Report - Page 131
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Comprehensive Income ...unrealized losses arising during the year on pension and post-retirement plans Tax (expense).... See accompanying Notes to Consolidated Financial Statements. $ 2012 1,608 $ 2010 1,178 $ 27...
  • Pizza Hut 2012 Annual Report - Page 132
    ... AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR See accompanying Notes to Consolidated Financial Statements. Form 10-K $ 40 YUM! BRANDS, INC. - 2012 Form 10-K
  • Pizza Hut 2012 Annual Report - Page 133
    ... Liabilities Redeemable noncontrolling interest Shareholders' Equity Common Stock, no par value, 750 shares authorized; 451 shares ... LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY See accompanying Notes to Consolidated Financial Statements. $ $ 776 301 313 272 111 136 1,...
  • Pizza Hut 2012 Annual Report - Page 134
    PART II ITEM 8 Financial Statements and Supplementary Data Consolidated Statements of Shareholders' Equity ...Income Dividends declared Repurchase of shares of Common Stock Employee stock option and SARs ... AT DECEMBER 29, 2012 See accompanying Notes to Consolidated Financial Statements. Total $ 1,114...
  • Pizza Hut 2012 Annual Report - Page 135
    ... ("China" or "China Division"), YUM Restaurants International ("YRI" or "International Division"), KFC U.S., Pizza Hut U.S., Taco Bell U.S., and YUM Restaurants India ("India" or ... "YUM" or the "Company") comprises primarily the worldwide operations of KFC, Pizza Hut and Taco Bell (...
  • Pizza Hut 2012 Annual Report - Page 136
    ... the advertising cooperatives are required for both Company-owned and franchise restaurants and are generally based on a percent of restaurant sales. We ...other direct incremental franchise and license support costs. Revenue Recognition. Revenues from Company-owned restaurants are recognized ...
  • Pizza Hut 2012 Annual Report - Page 137
    PART II ITEM 8 Financial Statements and Supplementary Data costs which will generally be used for the first...stock 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 date of grant....
  • Pizza Hut 2012 Annual Report - Page 138
    ... 8 Financial Statements and Supplementary Data leases as a condition to the refranchising of certain Company restaurants...., we determine fair value based upon the quoted market price, if available.... over the estimated useful lives of the assets as follows: 5 to 25 years for buildings and improvements...
  • Pizza Hut 2012 Annual Report - Page 139
    PART II ITEM 8 Financial Statements and Supplementary Data We expense rent associated with leased land or ... adjustments are made if such franchise agreement includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can include ...
  • Pizza Hut 2012 Annual Report - Page 140
    ... instances, on a period basis, we record the cost of any further share repurchases 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 years, our ...
  • Pizza Hut 2012 Annual Report - Page 141
    ...acquisition, which is based on the Little Sheep traded share price immediately subsequent to our offer to purchase the additional interest. Under the ...of acquisition, at fair value based on Little Sheep's traded share price immediately prior to our offer to purchase the business and recognized a non-...
  • Pizza Hut 2012 Annual Report - Page 142
    ... refranchised our remaining 331 Company-owned Pizza Hut dine-in restaurants in the United Kingdom. The newly signed franchise agreement for these stores ... our decision to refranchise or close all of our remaining company-owned Pizza Hut UK dine-in restaurants, primarily to ...
  • 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 ... Other prepaid expenses and current assets (a) Primarily reflects restaurants we have offered for sale to franchisees. $ YUM! BRANDS, INC. - 2012 Form 10-K 51
  • 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, ... $629 million, $599 million and $565 million in 2012, 2011 and 2010, respectively. Accounts Payable and Other Current Liabilities Accounts payable ...
  • 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 follows: ... (See Note 12) LONG-TERM DEBT INCLUDING HEDGE ACCOUNTING ADJUSTMENT In 2012, the Company executed a five-year syndicated senior unsecured revolving ...
  • Pizza Hut 2012 Annual Report - Page 146
    PART II ITEM 8 Financial Statements and Supplementary Data The following table summarizes...-annually thereafter. (b) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs... and fair value hedge accounting adjustments of $22 million, are as follows: Year ended...
  • Pizza Hut 2012 Annual Report - Page 147
    ... Company is exposed 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...
  • Pizza Hut 2012 Annual Report - Page 148
    ... was more likely than not a restaurant or restaurant group would be refranchised. 2012 Pizza Hut UK refranchising impairment (Level 3)(a) $ Little Sheep acquisition ... defined benefit pension plans covering certain full-time salaried and hourly U.S. employees. The most...
  • Pizza Hut 2012 Annual Report - Page 149
    ...scal year ends. U.S. Pension Plans 2012 Change in benefit obligation Benefit obligation at beginning of year Service cost Interest cost Participant contributions Plan ... 2011 - (14) (369) (383) $ Form 10-K $ Actuarial net loss Prior service cost $ $ U.S. Pension Plans 2012 421 $ 7 428 $...
  • Pizza Hut 2012 Annual Report - Page 150
    PART II ITEM 8 Financial Statements and Supplementary Data Information for pension plans with an accumulated ... any plans. Components of net periodic benefit cost: Net periodic benefit cost Service ... exceeding the sum of the service cost and interest cost for each plan during the year. See ...
  • Pizza Hut 2012 Annual Report - Page 151
    ... of compensation increase Weighted-average assumptions used to determine the net periodic benefit cost for fiscal years: U.S. Pension Plans 2011 5.90% 7.75%... up 81% of total pension plan assets at the 2012 measurement date, are to reduce interest rate and market risk and to provide adequate ...
  • 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 ...includes the performance condition period. Form 10-K Potential awards to employees under SharePower include stock options, SARs...
  • Pizza Hut 2012 Annual Report - Page 153
    ... requisite service period which includes the vesting period. Historically, the Company has repurchased shares on the open market in excess of the amount necessary to satisfy award exercises...our restaurant-level employees and our executives exercised the awards on average after 5 years ...
  • 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 related... dates subsequent to the 2010 fiscal year. Form 10-K On November 16, 2012, our Board of Directors authorized share repurchases through May 2014 of up ...
  • Pizza Hut 2012 Annual Report - Page 155
    ... tax credits. The favorable impact is primarily attributable to a majority of our income being earned outside of the U.S. where tax rates are generally lower than the U.S. rate. In 2012, this benefit was negatively impacted by the repatriation of current ...
  • Pizza Hut 2012 Annual Report - Page 156
    PART II ITEM 8 Financial Statements and Supplementary Data The details of 2012 and 2011 deferred tax ... losses and tax credit carryforwards Employee benefits Share-based compensation Self-insured .... Each of these positions is individually insignificant. 64 YUM! BRANDS, INC. - 2012 Form 10-K
  • Pizza Hut 2012 Annual Report - Page 157
    ...of our international operations. We consider our KFC, Pizza Hut and Taco Bell operating segments in the U.S. to be similar and therefore have aggregated ... $ We are principally engaged in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco Bell concepts. KFC, Pizza ...
  • 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 expenses(a)(d) ... Corporate(i) $ $ 2010 2,289 2,606 2,398 43 980 8,316 Form 10-K 66 YUM! BRANDS, INC. - 2012 Form 10-K
  • Pizza Hut 2012 Annual Report - Page 159
    PART II ITEM 8 Financial Statements and Supplementary Data China YRI U.S. India Corporate $ $ Long-Lived ..., $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 million ...
  • Pizza Hut 2012 Annual Report - Page 160
    ... and the consolidated case is styled In Re Taco Bell Wage and Hour Actions. The In Re Taco Bell Wage and... the class of people who use wheelchairs or scooters for mobility by failing to make its approximately 200 Company-owned restaurants in California accessible to the class. Plaintiffs contend that ...
  • Pizza Hut 2012 Annual Report - Page 161
    ... alleged that Pizza Hut did not properly reimburse its delivery drivers for various automobile costs, ...opt-ins. The final number has yet to be determined but is expected to be approximately 6,000. Pizza Hut ..., of salaried assistant managers who were allegedly misclassified and did not receive ...
  • Pizza Hut 2012 Annual Report - Page 162
    ... Quarter Second Quarter Revenues: Company sales Franchise and license fees and income Total revenues Restaurant profit Operating Pron.. 53rd week in 2011. See Note 4 for further discussion. Management's Responsibility for Financial Statements Form 10-K To Our Shareholders: We are responsible for ...
  • Pizza Hut 2012 Annual Report - Page 163
    ... an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this Annual Report on Form 10-K and ... financial reporting and has issued their report, included herein. Form 10-K Changes in Internal Control There ...
  • 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
    ...reference from Exhibit 10.7 to YUM's Annual Report on Form 10-K for the fiscal year ended December ...reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended December ...¬nitive Proxy Statement on Form DEF 14A for the Annual Meeting of Shareholders held on May...
  • Pizza Hut 2012 Annual Report - Page 168
    ...Purchasing Co-op, LLC, as filed herewith. YUM Restaurant General Manager Stock Option Plan, as effective April 1, 1999, and as amended through June 23, 2003,...-K for the fiscal year ended December 31, 2005. Form of YUM Director Stock Option Award Agreement, which is...
  • Pizza Hut 2012 Annual Report - Page 169
    ...cate • Retrieve a duplicate Form 1099-B • Purchase shares of YUM through the Company's Direct Stock Purchase Plan • Sell ... all questions regarding their accounts, outstanding options/stock appreciation rights or shares received through option/stock appreciation ...
  • Pizza Hut 2012 Annual Report - Page 170
    Shareholder Services DIRECT STOCK PURCHASE PLAN A prospectus and a brochure explaining this convenient plan... Exchange is the principal market for YUM Common Stock, which trades under the symbol YUM. Franchise ... Yum! Brands' Annual Report contains many of the valuable trademarks owned and used by Yum!...
  • Pizza Hut 2012 Annual Report - Page 171
    ...-Chief Executive Officer, JP 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, Inc. David W. Dorman 59 Non-Executive Chairman, CVS Caremark...
  • 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.