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YUM! BRANDS, INC.-2015 Form10-K24
Form 10-K
PART II
ITEM7Management’s Discussion and Analysis of Financial Condition and Results of Operations
2014 New Builds Closures Refranchised Acquired Other 2015
Franchise & License 12,814 522 (418) 90 (44) 5 12,969
Company-owned 788 55 (38) (90) 44 — 759
Total 13,602 577 (456) — — 5 13,728
2013 New Builds Closures Refranchised Acquired Other 2014
Franchise & License 12,601 586 (359) 6 (19) (1) 12,814
Company-owned 732 91 (48) (6) 19 — 788
Total 13,333 677 (407) — — (1) 13,602
Company Sales and Restaurant Profit
The changes in Company sales and Restaurant profit were as follows:
Income / (Expense)
2015 vs. 2014
2014
Store Portfolio
Actions Other FX 2015
Company sales $ 607 $ 24 $ (4) $ (18) $ 609
Cost of sales (180) (7) 12 6 (169)
Cost of labor (188) (6) (2) 6 (190)
Occupancy and other (189) (9) (1) 8 (191)
Restaurant Profit $ 50 $ 2 $ 5 $ 2 $ 59
Income / (Expense)
2014 vs. 2013
2013
Store Portfolio
Actions Other FX 2014
Company sales $ 609 $ 21 $ (24) $ 1 $ 607
Cost of sales (173) (7) — — (180)
Cost of labor (183) (9) 4 — (188)
Occupancy and other (182) (8) — 1 (189)
Restaurant Profit $ 71 $ (3) $ (20) $ 2 $ 50
In 2015, the increase in Company sales and Restaurant profit associated with store portfolio actions was driven by the impact of acquisitions in Canada
and the U.S. and net new unit growth, partially offset by refranchising. Significant other factors impacting Company sales and/or Restaurant profit were
commodity deflation, primarily in the U.S., partially offset by company same-store sales declines of 1%.
In 2014, the increase in Company sales associated with store portfolio actions was driven by the impact of net new unit growth, the acquisition of
restaurants in the U.S. and the acquisition of restaurants in Turkey from an existing franchisee in April 2013, partially offset by refranchising. Significant
other factors impacting Company sales and/or Restaurant profit were company same-store sales declines of 4%, commodity inflation, primarily in the
U.S., and higher self-insurance costs.
Franchise and License Fees and Income
In 2015, the increase in Franchise and license fees and income, excluding the impact of foreign currency translation, was driven by net new unit growth.
Franchise and license same-store sales grew 1%.
In 2014, the increase in Franchise and license fees and income, excluding the impact of foreign currency translation, was driven by net new unit growth.
Franchise and license same-store sales declined 1%.
G&A Expenses
In 2015, the increase in G&A expenses, excluding the impact of foreign currency translation, was driven by strategic international investments and
higher U.S. pension costs.
In 2014, the increase in G&A expenses, excluding the impact of foreign currency translation, was driven by strategic international investments, higher
litigation costs and lapping a pension curtailment gain in the first quarter of 2013 related to one of our UK pension plans, partially offset by lower pension
costs in the U.S.
Operating Profit
In 2015, the increase in Operating Profit, excluding the impact of foreign currency translation, was driven by net new unit growth and same-store sales
growth, partially offset by higher G&A expenses.
In 2014, the decrease in Operating Profit, excluding the impact of foreign currency translation, was driven by higher G&A expenses, same-store sales
declines and higher restaurant operating costs, partially offset by net new unit growth.