Pizza Hut 2014 Annual Report Download - page 147
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PART II
ITEM 8 Financial Statements and Supplementary Data
Goodwill and Intangible Assets
The changes in the carrying amount of goodwill are as follows:
China KFC Pizza Hut Taco Bell India Worldwide
Balance as of December 29, 2012
Goodwill, gross $ 466 $ 281 $ 194 $ 110 $ — $ 1,051
Accumulated impairment losses — — (17) — — (17)
Goodwill, net 466 281 177 $ 110 — 1,034
Acquisitions(a) 275 11 —2 90
Impairment Losses(c) (222) — — — — (222)
Disposals and other, net(b) 10 (18) (1) (4) — (13)
Balance as of December 28, 2013
Goodwill, gross 478 338 204 106 2 1,128
Accumulated impairment losses (222) — (17) — — (239)
Goodwill,net 256 338 187 106 2 889
Acquisitions — 2 — 8 — 10
Impairment Losses(c) (160) — — — — (160)
Disposals and other, net(b) (7) (28) (4) — — (39)
Balance as of December 27, 2014
Goodwill, gross 471 312 200 114 2 1,099
Accumulated impairment losses (382) — (17) — — (399)
Goodwill, net $ 89 $ 312 $ 183 $ 114 $ 2 700
(a) We recorded goodwill of $75 million and $11 million in our KFC and Pizza Hut Divisions, respectively, related to the acquisition of 65 KFC and 41 Pizza Hut
restaurants in Turkey.
(b) Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising.
(c) We recorded impairment charges of $160 million and $222 million in 2014 and 2013, respectively, to write down Little Sheep’s goodwill. See Note 4.
Intangible assets, net for the years ended 2014 and 2013 are as follows:
2014 2013
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
Definite-lived intangible assets
Reacquired franchise rights $ 186 $ (81) $ 188 $ (66)
Franchise contract rights 126 (92) 130 (90)
Lease tenancy rights 67 (12) 71 (12)
Favorable operating leases 15 (9) 20 (12)
Other 52 (25) 52 (22)
$ 446 $ (219) $ 461 $ (202)
Indefinite-lived intangible assets
KFC trademark $ 31 $ 31
Little Sheep trademark(a) 60 348
$ 91 $ 379
(a) We recorded an impairment charge of $284 million in 2014 to write down the Little Sheep trademark. See Note 4.
Amortization expense for all definite-lived intangible assets was $27 million in 2014 and $28 million in both 2013 and 2012. Amortization expense
for definite-lived intangible assets will approximate $28 million in 2015, $27 million in 2016, $25 million in 2017, $24 million in 2018 and $23 million
in 2019.
YUM! BRANDS, INC. - 2014 Form 10-K 53
NOTE 9
13MAR201516053226
Form 10-K