Pizza Hut 2015 Annual Report Download - page 119

YUM! BRANDS, INC.-2015 Form10-K 11
Form 10-K
PART I
ITEM 2 Properties
As of year end 2015, the Company’s Concepts owned approximately
905 units and leased land, building or both for approximately 8,025 units
worldwide. These units are further detailed as follows:
• The China Division leased land, building or both in approximately
5,770units.
• The KFC Division owned approximately 260 units and leased land,
building or both in approximately 1,125 units.
• The Pizza Hut Division owned approximately 110 units and leased land,
building or both in approximately 650 units.
• The Taco Bell Division owned approximately 535 units and leased land,
building or both in approximately 360 units.
• The India Division leased land, building or both in approximately 120 units.
Company-owned restaurants in China are generally leased for initial terms
of 10 to 15 years and generally do not have renewal options. Historically,
the Company has either been able to renew its China Division leases or
enter into competitive leases at replacement sites without a significant
impact on our operations, cash flows or capital resources. Company-owned
restaurants in the U.S. with leases are generally leased for initial terms of
15 or 20 years and generally have renewal options; however, Pizza Hut
delivery/carryout units in the U.S. generally are leased for significantly shorter
initial terms with shorter renewal options. Company-owned restaurants
outside of China and the U.S. with leases have initial lease terms and
renewal options that vary by country. The Company currently has land,
buildings or both in approximately 825 units, not included in the property
counts above, that it leases or subleases to franchisees, principally in the
U.S., UK and China.
The China Division leases their corporate headquarters and research facilities
in Shanghai, China. The KFC Division and Pizza Hut Division corporate
headquarters and a KFC and Pizza Hut research facility in Plano, Texas
are owned by Pizza Hut. Taco Bell leases its corporate headquarters and
research facility in Irvine, California. The YUM corporate headquarters and
a KFC research facility in Louisville, Kentucky are owned by the Company.
Additional information about the Company’s properties is included in the
Consolidated Financial Statements in Part II, Item 8.
The Company believes that its properties are generally in good operating
condition and are suitable for the purposes for which they are being used.
ITEM 3 Legal Proceedings
The Company is subject to various lawsuits covering a variety of allegations.
The Company believes that the ultimate liability, if any, in excess of amounts
already provided for these matters in the Consolidated Financial Statements,
is not likely to have a material adverse effect on the Company’s annual
results of operations, financial condition or cash flows. Matters faced by
the Company include, but are not limited to, claims from franchisees,
suppliers, employees, customers and others related to operational,
contractual or employment issues as well as claims that the Company
has infringed on third party intellectual property rights. In addition, the
Company brings claims from time-to-time relating to infringement of, or
challenges to, our intellectual property, including registered marks. Finally,
as a publicly-traded company, disputes arise from time to time with our
shareholders, including allegations that the Company breached federal
securities laws or that officers and/or directors breached fiduciary duties.
Descriptions of current specific claims and contingencies appear in Note
18, Contingencies, to the Consolidated Financial Statements included
in Part II, Item 8, which Note is incorporated by reference into this item.
ITEM 4 Mine Safety Disclosures
Not applicable