Pizza Hut 2012 Annual Report Download - page 129

YUM! BRANDS, INC.-2012 Form10-K 37
Form 10-K
PART II
ITEM 8Financial Statements andSupplementaryData
Report of Independent Registered Public
Accounting Firm
The Board of Directors and Shareholders
YUM! Brands, Inc.
We have audited the accompanying consolidated balance sheets of
YUM! Brands, Inc. and Subsidiaries (YUM) as of December29, 2012 and
December31, 2011, and the related consolidated statements of income,
comprehensive income, cash fl ows, and shareholders’ equity (defi cit) for
each of the fi scal years in the three-year period ended December29, 2012.
We also have audited YUM’s internal control over fi nancial reporting as
of December29, 2012, based on criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. YUM’s management is responsible for these
consolidated fi nancial statements, for maintaining effective internal control
over fi nancial reporting, and for its assessment of the effectiveness of
internal control over fi nancial reporting, included in the accompanying Item
9A, “Management’s Report on Internal Control over Financial Reporting”.
Our responsibility is to express an opinion on these consolidated fi nancial
statements and an opinion on YUM’s internal control over fi nancial reporting
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the fi nancial statements are free of material misstatement
and whether effective internal control over fi nancial reporting was maintained
in all material respects. Our audits of the consolidated fi nancial statements
included examining, on a test basis, evidence supporting the amounts and
disclosures in the fi nancial statements, assessing the accounting principles
used and signifi cant estimates made by management, and evaluating the
overall fi nancial statement presentation. Our audit of internal control over
fi nancial reporting included obtaining an understanding of internal control
over fi nancial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included performing
such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over fi nancial reporting is a process designed
to provide reasonable assurance regarding the reliability of fi nancial
reporting and the preparation of fi nancial statements for external purposes
in accordance with generally accepted accounting principles. A company’s
internal control over fi nancial reporting includes those policies and procedures
that (1)pertain to the maintenance of records that, in reasonable detail,
accurately and fairly refl ect the transactions and dispositions of the assets
of the company; (2)provide reasonable assurance that transactions are
recorded as necessary to permit preparation of fi nancial statements in
accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and
(3)provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets
that could have a material effect on the fi nancial statements.
Because of its inherent limitations, internal control over fi nancial reporting
may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, the consolidated fi nancial statements referred to above
present fairly, in all material respects, the fi nancial position of YUM as
of December29, 2012 and December31, 2011, and the results of its
operations and its cash fl ows for each of the fi scal years in the three-year
period ended December29, 2012, in conformity with U.S. generally
accepted accounting principles. Also in our opinion, YUM maintained, in
all material respects, effective internal control over fi nancial reporting as
of December29, 2012, based on criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
/s/KPMG LLP
Louisville, Kentucky
February19, 2013