Yum! Brands, Inc. (NYSE: YUM) today reported results for the
first quarter ended March 21, 2015, including EPS of $0.80,
excluding Special Items. Reported EPS was $0.81.
FIRST-QUARTER HIGHLIGHTS
- Worldwide system sales grew 4%.
Worldwide restaurant margin decreased 1.7 percentage points to
17.5%, and worldwide operating profit decreased 8%.
- Total international development was 294
new restaurants; 88% of this development occurred in emerging
markets.
- China Division system sales declined
6%, as 8% unit growth was offset by a 12% same-store sales decline.
Restaurant margin decreased 4.5 percentage points to 18.9%.
Operating profit decreased 31%.
- KFC Division system sales increased 8%,
driven by 2% unit growth and 5% same-store sales growth. Operating
margin increased 1.8 percentage points to 26.3%. Operating profit
increased 11%.
- Pizza Hut Division system sales
increased 2%, driven by 2% unit growth. Same-store sales were even.
Operating margin decreased 1.5 percentage points to 30.0%.
Operating profit declined 2%.
- Taco Bell Division system sales
increased 9%, driven by 3% unit growth and 6% same-store sales
growth. Operating margin increased 5.2 percentage points to 26.6%.
Operating profit increased 37%.
- India Division system sales increased
1%, as 18% unit growth was largely offset by an 11% same-store
sales decline.
- Worldwide effective tax rate decreased
to 23.3% from 25.8%.
- Foreign currency translation negatively
impacted operating profit by $20 million.
First Quarter
2015
2014 %
Change EPS Excluding Special Items $0.80 $0.87 (8)%
Special Items Gain/(Loss)1 $0.01 $0.00 NM EPS $0.81 $0.87 (7)%
1 See Reconciliation of Non-GAAP
Measurements to GAAP Results for further detail of Special
Items
Note: All comparisons are versus the same period a year ago and
exclude Special Items unless noted. System sales and operating
profit figures on this page exclude foreign currency translation;
operating margin figures are as reported.
GREG CREED COMMENTS
Greg Creed, CEO, said “While EPS declined in the first quarter,
I’m pleased with the strong performance from our KFC and Taco Bell
Divisions, as well as the continued progress we are making in
China. I’m confident we will deliver full-year EPS growth of at
least 10%, with a strong second half in China and solid
brand-building initiatives underway at each of our divisions.
Our confidence in China is bolstered by improving sales and
upward momentum in customer perceptions. China Division restaurant
margins were a healthy 19% even though same-store sales declined
12%, reinforcing our belief in significant operating leverage as
sales recover. We remain on track to open at least 700 new
restaurants in China this year with strong returns, laying the
groundwork for future growth.
Outside of China, our KFC and Taco Bell Divisions are firing on
all cylinders. These powerhouse brands produced both strong sales
growth and significant margin expansion. KFC delivered 5%
same-store sales growth, including an improving U.S. business. Taco
Bell continued to go from strength to strength with 6% same-store
sales growth, led by industry-leading innovation and a solid
breakfast platform. At Pizza Hut, our sales performance was
relatively flat, but plans are in place to get the business back on
track.
Importantly, we’re on pace to set a new record in international
development this year, opening 2,100 new restaurants and extending
our lead in emerging markets. We expect overall operating results
will enable us to achieve targeted earnings growth this year,
despite strengthening headwinds from foreign currency
translation.
Our central goal remains building three iconic, global brands
people trust and champion. We remain focused on the three keys to
driving shareholder value: same-store sales growth, new-unit
development and generating high returns on invested capital. I
believe this combination of efforts will enable us to reestablish
our track record of consistently delivering double-digit EPS growth
in 2015 and the years ahead.”
CHINA DIVISION
First Quarter
% Change 2015
2014 Reported
Ex F/X System Sales Growth
(9) (6) Same-Store Sales Growth (%) (12) +9 NM NM Franchise &
License Fees ($MM) 21 23 (4) (2) Restaurant Margin (%) 18.9 23.4
(4.5) (4.5) Operating Profit ($MM) 190 285 (33) (31)
- China Division same-store sales
for the quarter were significantly impacted by adverse publicity in
July 2014 surrounding improper food handling practices by a former
supplier.
- China Division system sales decreased
6%, prior to foreign currency translation.
- Same-store sales declined 12%,
including declines of 14% at KFC and 6% at Pizza Hut Casual
Dining.
- China Division opened 171 new units
during the quarter.
China Units Q1 2015
% Change2 Restaurants1
6,846 +8 KFC 4,896 +6 Pizza Hut Casual Dining
1,369 +24 Home Service 270 +30
1 Total includes East Dawning and Little
Sheep units.
2 Represents year-over-year change.
- Restaurant margin decreased 4.5
percentage points to 18.9%, driven by sales deleverage.
- Operating profit declined 31%, prior to
foreign currency translation.
- Foreign currency translation negatively
impacted operating profit by $6 million.
- Consistent with prior years, China
Division's first quarter includes January and February results
only. The first quarter includes Chinese New Year, which is peak
season for the China Division.
KFC DIVISION
First Quarter
% Change
2015 2014
Reported Ex
F/X Restaurants 14,189 13,892 +2 NA System Sales Growth
+1 +8 Same-Store Sales Growth (%) +5 +1 NM NM Franchise &
License Fees ($MM) 197 195 +1 +7 Restaurant Margin (%) 15.3 12.9
2.4 2.2 Operating Profit ($MM) 169 163 +4 +11 Operating Margin (%)
26.3 24.5 1.8 1.2
- KFC Division system sales
increased 8%, excluding foreign currency translation.
First Quarter (% Change) Int'l
Emerging Markets Int'l Developed
Markets U.S. System Sales Growth
(Ex F/X) +11% +6% +6%
Same-Store Sales Growth
+4% +4% +7%
- KFC Division opened 72 new
international restaurants in 36 countries, including 57 units in
emerging markets. 82% of these new units were opened by
franchisees.
- Operating margin increased 1.8
percentage points, driven by same-store sales growth and new-unit
development.
- Foreign currency translation negatively
impacted operating profit by $13 million.
KFC MARKETS1
Percent of KFC System Sales
2
SYSTEM Sales Growth Ex F/X First Quarter (%)
Emerging Markets Asia (e.g. Malaysia, Indonesia,
Philippines) 8% +3 Africa 7% +15 Latin America (e.g. Mexico, Peru)
6% +9 Middle East / North Africa 6% +3 Russia 4% +48 Thailand 3%
+11 Continental Europe (e.g. Poland) 2% +16
Developed Markets U.S. 24% +6 Asia (e.g. Japan, Korea,
Taiwan) 10% +1 Australia 10% +9 U.K. 9% +5 Continental Europe (e.g.
France, Germany) 7% +7 Canada 3% +1 Latin America (e.g. Puerto
Rico) 1% +6
1 See website www.yum.com
under tab "Investors" for a list of the countries within each of
the markets.
2 Reflects Full Year 2014.
PIZZA HUT DIVISION
First Quarter
% Change
2015 2014
Reported Ex
F/X Restaurants 13,595 13,338 +2 NA System Sales Growth
(1) +2 Same-Store Sales Growth (%) Even (2) NM NM Franchise &
License Fees ($MM) 127 127 Even +2 Restaurant Margin (%) 11.6 10.8
0.8 0.4 Operating Profit ($MM) 81 84 (4) (2) Operating Margin (%)
30.0 31.5 (1.5) (1.6)
- Pizza Hut Division system sales
increased 2%, prior to foreign currency translation.
First Quarter (% Change) Int'l
Emerging Markets Int'l Developed
Markets U.S. System Sales Growth
(Ex F/X) +7% +3% Even
Same-Store Sales Growth
+2% +1% (1)%
- Pizza Hut Division opened 35 new
international restaurants in 20 countries, including 16 units in
emerging markets. 94% of these new units were opened by
franchisees.
- Operating margin declined 1.5
percentage points, driven by strategic investments in international
G&A.
- Foreign currency translation negatively
impacted operating profit by $1 million.
PIZZA HUT MARKETS1
Percent of PizzaHut System
Sales2
SYSTEM Sales Growth Ex F/X First Quarter (%)
Emerging Markets Latin America (e.g. Mexico, Peru) 7% +8
Asia (e.g. Malaysia, Indonesia, Philippines) 5% +4 Middle East /
North Africa 5% +4 Continental Europe (e.g. Poland) 1% +6
Developed Markets U.S. 55% Even Asia (e.g. Japan, Korea,
Taiwan) 9% (1) U.K. 6% +3 Continental Europe (e.g. France, Germany)
5% +5 Australia 3% (3) Canada 3% +5 Latin America (e.g. Puerto
Rico) 1% +10
1 See website www.yum.com
under tab "Investors" for a list of the countries within each of
the markets.
2 Reflects Full Year 2014.
TACO BELL DIVISION
First Quarter
% Change
2015 2014
Reported Ex
F/X Restaurants 6,228 6,055 +3 NA System Sales Growth +9
+9 Same-Store Sales Growth (%) +6 (1) NM NM Franchise & License
Fees ($MM) 96 85 +13 +13 Restaurant Margin (%) 19.6 15.6 4.0 4.0
Operating Profit ($MM) 115 84 +37 +37 Operating Margin (%) 26.6
21.4 5.2 5.2
- Taco Bell Division system sales
increased 9%, driven by 6% same-store sales growth and 3% unit
growth.
- Taco Bell Division opened 47 new
restaurants; 89% of these new units were opened by
franchisees.
- Restaurant margin was 19.6%, an
increase of 4.0 percentage points, driven by same-store sales
growth. The combination of pricing actions and favorable menu mix
more than offset inflation during the quarter.
- Operating margin increased 5.2
percentage points, including a 0.9 percentage point benefit from
the overlap of franchise incentives paid in 2014 to support the
national launch of breakfast.
INDIA DIVISION
- India Division system sales
increased 1% prior to foreign currency translation, as 18% unit
growth was largely offset by an 11% same-store sales decline.
- Operating loss was $4 million, as
compared to an operating loss of $3 million in prior year.
India Units Q1 2015
% Change2 Restaurants1
833 +18% KFC 395 +17% Pizza Hut Casual Dining
182 (1)% Home Service 249 +38%
1 Total includes 7 Taco Bell units.
2 Represents year-over-year change.
SHARE REPURCHASE UPDATE
- Year-to-date through April 20, 2015, we
repurchased 2.6 million shares totaling $200 million at an average
price of $76.
CONFERENCE CALL
Yum! Brands, Inc. will host a conference call to review the
company's financial performance and strategies at 9:15 a.m. Eastern
Time Wednesday, April 22, 2015. The number is 877/815-2029 for U.S.
callers and 706/645-9271 for international callers.
The call will be available for playback beginning at 12:45 p.m.
Eastern Time Wednesday, April 22, through midnight Wednesday, May
20, 2015. To access the playback, dial 855/859-2056 in the United
States and 404/537-3406 internationally. The playback pass code is
20279960.
The webcast and the playback can be accessed via the internet by
visiting Yum! Brands' website, www.yum.com/investors and selecting “Q1 2015
Earnings Conference Call” under “Investment Events.” A podcast will
be available within 24 hours.
ADDITIONAL INFORMATION
ONLINE
Quarter end dates for each division, restaurant-count details
and definitions of terms are available online at www.yum.com under
“Investors”.
This announcement, any related announcements and the related
webcast may contain “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. We intend all forward-looking
statements to be covered by the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. Our forward-looking
statements are subject to risks and uncertainties, which may cause
actual results to differ materially from those projected. Factors
that can cause our actual results to differ materially include, but
are not limited to: food safety and food borne-illness issues;
changes in economic conditions, consumer preferences, tax rates and
laws and the regulatory environment, as well as increased
competition and other risks in China, where a significant and
growing portion of our restaurants are located; the impact or
threat of any widespread illness or outbreaks of viruses or other
diseases; changes in economic and political conditions in the other
countries outside the U.S. where we operate; our ability to protect
the integrity and security of individually identifiable data of our
customers and employees; our ability to secure and maintain
distribution and adequate supply to our restaurants; the success of
our international development strategy; commodity, labor and other
operating costs; the continued viability and success of our
franchise and license operators; consumer preferences and
perceptions of our brands; the impact of social media; pending or
future litigation and legal claims or proceedings; changes in or
noncompliance with government regulations; tax matters, including
disagreements with taxing authorities; significant changes in
global economic conditions, including consumer spending, consumer
confidence and unemployment; and competition within the retail food
industry, including with respect to price and quality of food
products, new product development, advertising levels and
promotional initiatives, customer service, reputation, restaurant
location, and attractiveness and maintenance of properties. You
should consult our filings with the Securities and Exchange
Commission (including the information set forth under the captions
“Risk Factors” and “Forward-Looking Statements” in our Annual
Report on Form 10-K) for additional detail about factors that could
affect our financial and other results. Forward-looking statements
are based on current expectations and assumptions and currently
available data and are neither predictions nor guarantees of future
events or performance. You should not place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We are not undertaking to update any of these statements.
Yum! Brands, Inc., based in Louisville, Kentucky, has over
41,000 restaurants in more than 125 countries and territories. Yum!
is ranked #216 on the Fortune 500 List with revenues of over $13
billion and in 2014 was named among the top 100 Corporate Citizens
by Corporate Responsibility Magazine. The Company's restaurant
brands - KFC, Pizza Hut and Taco Bell - are the global leaders of
the chicken, pizza and Mexican-style food categories. Outside the
United States, the Yum! Brands system opened over five new
restaurants per day, making it a leader in international retail
development.
YUM! Brands, Inc.
Condensed Consolidated Summary of
Results
(amounts in millions, except per share
amounts)
(unaudited)
Quarter ended % Change 3/21/15 3/22/14 B/(W) Company
sales $ 2,179 $ 2,292 (5) Franchise and license fees and income 443
432 3 Total revenues 2,622 2,724 (4)
Company restaurant expenses Food and paper 688 725 5 Payroll
and employee benefits 493 493 — Occupancy and other operating
expenses 616 633 3 Company restaurant expenses 1,797
1,851 3 General and administrative expenses 295 271 (8)
Franchise and license expenses 34 33 (7) Closures and impairment
(income) expenses 3 3 (20) Refranchising (gain) loss (10 ) (3 ) NM
Other (income) expense (3 ) (2 ) 72 Total costs and expenses, net
2,116 2,153 2 Operating Profit 506 571 (11)
Interest expense, net 34 33 (3) Income before income
taxes 472 538 (12) Income tax provision 111 139 21
Net income - including noncontrolling interests 361 399 (10) Net
income (loss) - noncontrolling interests (1 ) — NM Net
income - YUM! Brands, Inc. $ 362 $ 399 (9)
Effective tax rate 23.4 % 25.9 % 2.5 ppts.
Basic EPS
Data
EPS $ 0.83 $ 0.89 (7)
Average shares outstanding
438 447 2
Diluted EPS
Data
EPS $ 0.81 $ 0.87 (7) Average shares outstanding 446
456 2 Dividends declared per common share $ —
$ 0.37
See accompanying notes.
Percentages may not recompute due to rounding.
YUM! Brands, Inc.
CHINA DIVISION Operating
Results
(amounts in millions)
(unaudited)
Quarter ended % Change 3/21/15 3/22/14 B/(W)
Company sales $ 1,235 $ 1,356 (9) Franchise and license fees and
income 21 23 (4) Total revenues 1,256 1,379
(9) Company restaurant expenses Food and paper 392
418 6 Payroll and employee benefits 244 241 (1) Occupancy and other
operating expenses 366 380 4 Company restaurant
expenses 1,002 1,039 4 General and administrative expenses 68 62
(10) Franchise and license expenses 4 3 (52) Closures and
impairment (income) expenses 2 2 (4) Other (income) expense (10 )
(12 ) (20) 1,066 1,094 2 Operating Profit $ 190
$ 285 (33) Company sales 100.0 % 100.0 % Food
and paper 31.8 30.8 (1.0 ppts.) Payroll and employee benefits 19.7
17.8 (1.9 ppts.) Occupancy and other operating expenses 29.6
28.0 (1.6 ppts.) Restaurant margin 18.9 % 23.4 % (4.5 ppts.)
Operating margin 15.1 % 20.7 % (5.6 ppts.)
See accompanying notes.
Percentages may not recompute due to rounding.
YUM! Brands, Inc.
KFC DIVISION Operating Results
(amounts in millions)
(unaudited)
Quarter ended % Change 3/21/15 3/22/14 B/(W)
Company sales $ 445 $ 469 (5) Franchise and license fees and income
197 195 1 Total revenues 642 664 (3)
Company restaurant expenses Food and paper 153 164 7 Payroll
and employee benefits 104 114 9 Occupancy and other operating
expenses 120 130 8 Company restaurant expenses 377
408 8 General and administrative expenses 79 76 (3) Franchise and
license expenses 17 17 — Closures and impairment (income) expenses
— — NM Other (income) expense — — NM 473 501
6 Operating Profit $ 169 $ 163 4
Company sales 100.0 % 100.0 % Food and paper 34.3 34.9 0.6 ppts.
Payroll and employee benefits 23.4 24.3 0.9 ppts. Occupancy and
other operating expenses 27.0 27.9 0.9 ppts.
Restaurant margin 15.3 % 12.9 % 2.4 ppts. Operating margin
26.3 % 24.5 % 1.8 ppts.
See accompanying notes.
Percentages may not recompute due to rounding.
YUM! Brands, Inc.
PIZZA HUT DIVISION Operating
Results
(amounts in millions)
(unaudited)
Quarter ended % Change 3/21/15 3/22/14 B/(W)
Company sales $ 144 $ 140 3 Franchise and license fees and income
127 127 — Total revenues 271 267 1
Company restaurant expenses Food and paper 40 42 4 Payroll
and employee benefits 44 43 (4) Occupancy and other operating
expenses 43 40 (6) Company restaurant expenses 127
125 (2) General and administrative expenses 57 49 (15) Franchise
and license expenses 8 8 (2) Closures and impairment (income)
expenses — 1 NM Other (income) expense (2 ) — NM 190
183 (4) Operating Profit $ 81 $ 84 (4)
Company sales 100.0 % 100.0 % Food and paper 27.8 29.8 2.0 ppts.
Payroll and employee benefits 30.8 30.5 (0.3 ppts.) Occupancy and
other operating expenses 29.8 28.9 (0.9 ppts.)
Restaurant margin
11.6 % 10.8 % 0.8 ppts. Operating margin 30.0 % 31.5 % (1.5
ppts.)
See accompanying notes.
Percentages may not recompute due to rounding.
YUM! Brands, Inc.
TACO BELL DIVISION Operating
Results
(amounts in millions)
(unaudited)
Quarter ended % Change 3/21/15 3/22/14 B/(W)
Company sales $ 335 $ 306 9 Franchise and license fees and income
96 85 13 Total revenues 431 391 10
Company restaurant expenses Food and paper 94 92 (2) Payroll
and employee benefits 98 92 (5) Occupancy and other operating
expenses 78 74 (5) Company restaurant expenses 270
258 (4) General and administrative expenses 43 45 2 Franchise and
license expenses 2 4 22 Closures and impairment (income) expenses 1
— NM Other (income) expense — — NM 316 307
(3) Operating Profit $ 115 $ 84 37
Company sales 100.0 % 100.0 % Food and paper 28.1 30.1 2.0 ppts.
Payroll and employee benefits 29.1 30.2 1.1 ppts. Occupancy and
other operating expenses 23.2 24.1 0.9 ppts.
Restaurant margin
19.6 % 15.6 % 4.0 ppts. Operating margin 26.6 % 21.4 % 5.2
ppts.
See accompanying notes.
Percentages may not recompute due to rounding.
YUM! Brands, Inc.
Condensed Consolidated Balance
Sheets
(amounts in millions)
(unaudited) 3/21/15 12/27/14
ASSETS Current
Assets Cash and cash equivalents $ 675 $ 578 Accounts and notes
receivable, less allowance: $15 in 2015 and $12 in 2014 373 325
Inventories 276 301 Prepaid expenses and other current assets 259
254 Deferred income taxes 97 93 Advertising cooperative assets,
restricted 103 95
Total Current Assets 1,783
1,646
Property, plant and equipment, net of
accumulated depreciation and amortization of $3,627 in 2015 and
$3,584 in 2014
4,374 4,498 Goodwill 684 700 Intangible assets, net 299 318
Investments in unconsolidated affiliates 32 52 Other assets 547 560
Deferred income taxes 586 571
Total Assets $
8,305 $ 8,345
LIABILITIES AND SHAREHOLDERS'
EQUITY Current Liabilities Accounts payable and other
current liabilities $ 1,790 $ 1,972 Income taxes payable 131 77
Short-term borrowings 266 267 Advertising cooperative liabilities
103 95
Total Current Liabilities 2,290 2,411
Long-term debt 3,121 3,077 Other liabilities and deferred
credits 1,123 1,244
Total Liabilities 6,534
6,732 Redeemable noncontrolling interest 8
9
Shareholders' Equity Common stock, no
par value, 750 shares authorized; 433 shares and 434 shares issued
in 2015 and 2014, respectively — — Retained earnings 1,978 1,737
Accumulated other comprehensive income (loss) (271 ) (190 )
Total Shareholders' Equity - YUM! Brands, Inc. 1,707 1,547
Noncontrolling interests 56 57
Total Shareholders'
Equity 1,763 1,604
Total Liabilities,
Redeemable Noncontrolling Interest and Shareholders' Equity $
8,305 $ 8,345
See accompanying notes.
YUM! Brands, Inc.
Condensed Consolidated Statements of
Cash Flows
(amounts in millions)
(unaudited)
Quarter ended 3/21/15 3/22/14
Cash Flows -
Operating Activities Net income - including noncontrolling
interests $ 361 $ 399 Depreciation and amortization 139 140
Closures and impairment (income) expenses 3 3 Refranchising (gain)
loss (10 ) (3 ) Contributions to defined benefit pension plans (76
) (8 ) Deferred income taxes (29 ) (11 ) Equity income from
investments in unconsolidated affiliates (9 ) (13 ) Excess tax
benefit from share-based compensation (19 ) (13 ) Share-based
compensation expense 15 12 Changes in accounts and notes receivable
3 23 Changes in inventories 21 33 Changes in prepaid expenses and
other current assets
(27
) (2 ) Changes in accounts payable and other current liabilities
113
(20 ) Changes in income taxes payable 51 53 Other, net (8 ) (23 )
Net Cash Provided by Operating Activities
528
570
Cash Flows - Investing Activities
Capital spending
(227
) (172 ) Proceeds from refranchising of restaurants 22 2 Other, net
(3
) 2
Net Cash Used in Investing Activities
(208
) (168 )
Cash Flows - Financing Activities Repayments
of long-term debt (3 ) (2 ) Short-term borrowings by original
maturity More than three months - proceeds — — More than three
months - payments — — Three months or less, net — — Revolving
credit facilities, three months or less, net 53 35 Repurchase
shares of Common Stock (124 ) (124 ) Excess tax benefit from
share-based compensation 19 13 Employee stock option proceeds 10 11
Dividends paid on Common Stock (178 ) (164 ) Other, net (23 ) (6 )
Net Cash Used in Financing Activities (246 ) (237 )
Effect of Exchange Rate on Cash and Cash Equivalents 23
(4 )
Net Increase in Cash and Cash Equivalents 97 161
Cash and Cash Equivalents - Beginning of Period 578
573
Cash and Cash Equivalents - End of Period $ 675
$ 734
See accompanying notes.
Reconciliation of Non-GAAP Measurements to
GAAP Results(amounts in millions, except per share
amounts)(unaudited)
In addition to the results provided in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP") throughout this
document, the Company has provided non-GAAP measurements which
present operating results in 2015 and 2014 on a basis before
Special Items. Special Items presented below relate primarily to
U.S. refranchising gains in 2015 and 2014 which is further
described in (c) in the accompanying notes.
The Company uses earnings before Special Items as a key
performance measure of results of operations for the purpose of
evaluating performance internally and Special Items are not
included in any of our segment results. This non-GAAP measurement
is not intended to replace the presentation of our financial
results in accordance with GAAP. Rather, the Company believes that
the presentation of earnings before Special Items provides
additional information to investors to facilitate the comparison of
past and present operations, excluding items in the quarters ended
March 21, 2015 and March 22, 2014 that the Company does
not believe are indicative of our ongoing operations due to their
size and/or nature.
Quarter ended 3/21/15 3/22/14
Detail of Special
Items U.S. Refranchising gain (loss)(c) $ 7 $ 2 Other Special
Items Income (Expense) (2 ) — Total Special Items Income
(Expense) 5 2 Tax Benefit (Expense) on Special Items (2 ) (1 )
Special Items Income (Expense), net of tax $ 3 $ 1
Average diluted shares outstanding 446 456 Special
Items diluted EPS $ 0.01 $ —
Reconciliation
of Operating Profit Before Special Items to Reported Operating
Profit Operating Profit Before Special Items $ 501 $ 569
Special Items Income (Expense) 5 2 Reported Operating
Profit $ 506 $ 571
Reconciliation of EPS
Before Special Items to Reported EPS Diluted EPS Before Special
Items $ 0.80 $ 0.87 Special Items EPS 0.01 — Reported
EPS $ 0.81 $ 0.87
Reconciliation of
Effective Tax Rate Before Special Items to Reported Effective Tax
Rate Effective Tax Rate Before Special Items 23.3 % 25.8 %
Impact on Tax Rate as a result of Special Items 0.1 % 0.1 %
Reported Effective Tax Rate 23.4 % 25.9 %
YUM! Brands, Inc.
Segment Results
(amounts in millions)
(unaudited)
Quarter Ended 3/21/15 China
KFC
Pizza Hut
Taco Bell India
CorporateandUnallocated
Consolidated Total revenues $ 1,256 $ 642 $ 271
$ 431 $ 22 $ — $ 2,622
Company restaurant expenses 1,002 377 127 270 21 — 1,797 General
and administrative expenses 68 79 57 43 4 44 295 Franchise and
license expenses 4 17 8 2 1 2 34 Closures and impairment (income)
expenses 2 — — 1 — — 3 Refranchising (gain) loss — — — — — (10 )
(10 ) Other (income) expense (10 ) — (2 ) — —
9 (3 ) 1,066 473 190 316 26
45 2,116 Operating Profit (loss) $ 190
$ 169 $ 81 $ 115 $ (4 ) $ (45 ) $ 506
Quarter Ended
3/22/14 China KFC Pizza Hut Taco Bell India
CorporateandUnallocated
Consolidated Total revenues $ 1,379 $ 664 $ 267
$ 391 $ 23 $ — $ 2,724
Company restaurant expenses 1,039 408 125 258 21 — 1,851 General
and administrative expenses 62 76 49 45 4 35 271 Franchise and
license expenses 3 17 8 4 1 — 33 Closures and impairment (income)
expenses 2 — 1 — — — 3 Refranchising (gain) loss — — — — — (3 ) (3
) Other (income) expense (12 ) — — — —
10 (2 ) 1,094 501 183 307 26
42 2,153 Operating Profit (loss) $ 285
$ 163 $ 84 $ 84 $ (3 ) $ (42 ) $ 571
The above tables reconcile segment information, which is based
on management responsibility, with our Condensed Consolidated
Summary of Results. Corporate and unallocated expenses comprise
items that are not allocated to segments for performance reporting
purposes.
The Corporate and Unallocated column in the above tables
includes, among other amounts, all amounts that we have deemed
Special Items. See Reconciliation of Non-GAAP Measurements to GAAP
Results.
Notes to the Condensed Consolidated Summary
of Results, Condensed Consolidated Balance Sheetsand
Condensed Consolidated Statements of Cash Flows(amounts in
millions)(unaudited)
(a) Amounts presented as of and for the quarter and year to date
ended March 21, 2015 are preliminary.
(b) Other (income) expense for the China Division primarily
consists of equity income (loss) from investments in unconsolidated
affiliates.
(c) During the quarters ended March 21, 2015 and
March 22, 2014, we recorded gains of $7 million and $2
million, respectively, related to refranchising in the U.S.
Refranchising (gains) losses in the U.S. have been reflected as
Special Items for certain performance measures (see accompanying
reconciliation to reported results) due to the scope of our U.S.
refranchising program in recent years and the volatility in
associated gains and losses.
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Yum! Brands, Inc.Analysts:Steve Schmitt, 888-298-6986Vice
President Investor Relations & Corporate StrategyorElizabeth
Grenfell, 888-298-6986Director Investor RelationsorMedia:Virginia
Ferguson, 502-874-8200Director Public Relations
Yum Brands (NYSE:YUM)
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From Aug 2024 to Sep 2024
Yum Brands (NYSE:YUM)
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From Sep 2023 to Sep 2024