Pizza Hut 2012 Annual Report Download - page 162

YUM! BRANDS, INC.-2012 Form10-K 70
Form 10-K
PART II
ITEM 8Financial Statements andSupplementaryData
NOTE20 Selected Quarterly Financial Data (Unaudited)
2012
First Quarter Second Quarter Third Quarter Fourth Quarter Total
Revenues:
Company sales $ 2,344 $ 2,762 $ 3,142 $ 3,585 $ 11,833
Franchise and license fees and income 399 406 427 568 1,800
Total revenues 2,743 3,168 3,569 4,153 13,633
Restaurant profi t 440 423 599 519 1,981
Operating Profi t(a) 645 473 671 505 2,294
Net Income – YUM! Brands, Inc. 458 331 471 337 1,597
Basic earnings per common share 0.99 0.71 1.02 0.74 3.46
Diluted earnings per common share 0.96 0.69 1.00 0.72 3.38
Dividends declared per common share 0.285 0.285 — 0.67 1.24
2011
First Quarter Second Quarter Third Quarter Fourth Quarter Total
Revenues:
Company sales $ 2,051 $ 2,431 $ 2,854 $ 3,557 $ 10,893
Franchise and license fees and income 374 385 420 554 1,733
Total revenues 2,425 2,816 3,274 4,111 12,626
Restaurant profi t 360 386 494 513 1,753
Operating Profi t(b) 401 419 488 507 1,815
Net Income – YUM! Brands, Inc. 264 316 383 356 1,319
Basic earnings per common share 0.56 0.67 0.82 0.77 2.81
Diluted earnings per common share 0.54 0.65 0.80 0.75 2.74
Dividends declared per common share — 0.50 — 0.57 1.07
(a) Includes a non-cash gain recognized upon acquisition of Little Sheep of $74million in the first quarter, refranchising losses associated with the Pizza Hut UK dine-in business of $24million
and $46million in the first and fourth quarters, respectively, net U.S. refranchising gains of $45million and $69million in the first and fourth quarters, respectively and the YUM Retirement
Plan settlement charge of $84million in the fourth quarter. See Note4 for further discussion.
(b) Includes losses related to the LJS and A&W divestitures of $68million and $17million in the first and third quarters, respectively and a refranchising loss associated with the Pizza Hut UK
dine-in business of $76million in the third quarter. The fourth quarter of 2011 also includes the $25million impact of the 53rd week in 2011. See Note4 for further discussion.
Management’s Responsibility for Financial Statements
To Our Shareholders:
We are responsible for the preparation, integrity and fair presentation of the
Consolidated Financial Statements, related notes and other information
included in this annual report.The fi nancial statements were prepared in
accordance with accounting principles generally accepted in the United
States of America and include certain amounts based upon our estimates
and assumptions, as required.Other fi nancial information presented in
the annual report is derived from the fi nancial statements.
We maintain a system of internal control over fi nancial reporting, designed to
provide reasonable assurance as to the reliability of the fi nancial statements,
as well as to safeguard assets from unauthorized use or disposition.The
system is supported by formal policies and procedures, including an
active Code of Conduct program intended to ensure employees adhere
to the highest standards of personal and professional integrity.We have
conducted an evaluation of the effectiveness of our internal control over
fi nancial reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.Based on our evaluation, we concluded that our
internal control over fi nancial reporting was effective as of December29,
2012.Our internal audit function monitors and reports on the adequacy of
and compliance with the internal control system, and appropriate actions
are taken to address signifi cant control defi ciencies and other opportunities
for improving the system as they are identifi ed.
The Consolidated Financial Statements have been audited and reported
on by our independent auditors, KPMG LLP, who were given free access
to all fi nancial records and related data, including minutes of the meetings
of the Board of Directors and Committees of the Board.We believe that
management representations made to the independent auditors were
valid and appropriate.Additionally, the effectiveness of our internal control
over fi nancial reporting has been audited and reported on by KPMG LLP.
The Audit Committee of the Board of Directors, which is composed
solely of outside directors, provides oversight to our fi nancial reporting
process and our controls to safeguard assets through periodic meetings
with our independent auditors, internal auditors and management.Both
our independent auditors and internal auditors have free access to the
Audit Committee.
Although no cost-effective internal control system will preclude all errors
and irregularities, we believe our controls as of December29, 2012 provide
reasonable assurance that our assets are reasonably safeguarded.
Patrick J. Grismer
Chief Financial Offi cer