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YUM! BRANDS, INC.-2015 Form10-K 49
Form 10-K
PART II
ITEM 8Financial Statements and Supplementary Data
NOTE9 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 28, 2013
Goodwill, gross $ 478 $ 338 $ 204 $ 106 $ 2 $ 1,128
Accumulated impairment losses(a) (222) — (17) — — (239)
Goodwill, net 256 338 187 106 2 889
Acquisitions — 2 — 8 — 10
Impairment Losses(a) (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(a) (382) — (17) — — (399)
Goodwill, net 89 312 183 114 2 700
Acquisitions — 1 — 1 — 2
Disposals and other, net(b) (4) (32) (7) (2) (1) (46)
Balance as of December 26, 2015
Goodwill, gross 467 281 193 113 1 1,055
Accumulated impairment losses(a) (382) — (17) — — (399)
Goodwill, net $ 85 $ 281 $ 176 $ 113 $ 1 $ 656
(a) China Accumulated impairment losses represent Little Sheep impairment, of which $160 million was recorded in 2014. See Note 4.
(b) Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising.
Intangible assets, net for the years ended 2015 and 2014 are as follows:
2015 2014
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Definite-lived intangible assets
Reacquired franchise rights $ 168 $ (91) $ 186 $ (81)
Franchise contract rights 123 (94) 126 (92)
Lease tenancy rights 57 (10) 67 (12)
Favorable operating leases 11 (7) 15 (9)
Other 54 (27) 52 (25)
$ 413 $ (229) $ 446 $ (219)
Indefinite-lived intangible assets
KFC trademark $ 31 $ 31
Little Sheep trademark 56 60
$ 87 $ 91
Amortization expense for all definite-lived intangible assets was $26 million in 2015, $27 million in 2014 and $28 million in 2013. Amortization expense for
definite-lived intangible assets will approximate $21 million in 2016, $21 million in 2017, $19 million in 2018, $18 million in 2019 and $17 million in 2020.