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YUM · Yum! Brands

32 filings

10-K

YUM 10-K Annual Reports

Yum! Brands - 32 annual reports

Filing record · 2016–202610-K1110-Q328-K146

2025
Yum! Brands Annual Report, Year Ended Dec 31, 2025
Yum! Brands, Inc. (YUM) reported fiscal 2025 total revenues of $8.21 billion, up from $7.55 billion in 2024, with Operating Profit of $2.57 billion and Net Income of $1.56 billion (diluted EPS $5.55, versus $5.22 in 2024). Excluding Special Items, diluted EPS was $6.05, up 10% per the filing. Worldwide system sales reached $68.30 billion, with same-store sales growth of 3% and 1,939 net new units. Company restaurant margin declined to 15.7% from 16.9%, reflecting Company-owned restaurant growth, including the Taco Bell Southeast U.S. acquisition of 128 restaurants for approximately $670 million. The company operates over 63,000 restaurants in 155 countries, 97% franchised. Pizza Hut Division results weakened, with system sales down 3% excluding FX, same-store sales down 1%, and Operating Profit down 9%. YUM has begun a strategic options review for the Pizza Hut brand, which it intends to complete in 2026 with no assurance of any specific outcome. Management stated that operating cash flow exceeded $2 billion in 2025, that the Board declared a quarterly dividend of $0.75 per share, and that $1.1 billion of share repurchase capacity remained under the May 2024 authorization. Total debt was about $12.0 billion, and the filing states that the company targets a net leverage ratio of approximately 4.0x EBITDA over the medium term. The filing also discloses material contingencies, including an IRS assertion of approximately $2.1 billion in tax plus $418 million in penalties for fiscal 2014, which the company is contesting in Tax Court, and an Indian regulatory penalty order of approximately $125 million that the company is contesting and for which it does not consider a significant loss to be probable.
Feb 20, 2026
2024
Yum! Brands Annual Report, Year Ended Dec 31, 2024
Yum! Brands, Inc. (YUM) reported fiscal 2024 total revenues of $7.55 billion, up from $7.08 billion in 2023, and operating profit of $2.40 billion versus $2.32 billion. Diluted EPS was $5.22 (GAAP) and $5.48 excluding Special Items, with full-year EPS excluding Special Items and the 53rd week at $5.39. Fiscal 2024 included a 53rd week that added $96 million to total revenues and $0.09 per share to diluted EPS. The system spans more than 61,000 restaurants in over 155 countries and territories, 98% of which are franchised. Worldwide same-store sales declined 1% and system sales rose 3% as reported. Core Operating Profit grew 9%. Net cash provided by operating activities was $1.69 billion. The company's total debt was approximately $11.4 billion at year-end. Management stated it expects to maintain a consolidated net leverage ratio of about 4.0x EBITDA over the medium term by issuing incremental debt, and plans to deliver materially higher capital returns than in the prior two years. The Board declared a quarterly dividend of $0.71 per share in February 2025, a 6% increase from $0.67, and $1.6 billion remained under the May 2024 share repurchase authorization. Key risk items include an IRS proposed adjustment for fiscal 2014 asserting an underpayment of $2.1 billion plus $418 million in penalties, with interest estimated at about $1.4 billion through December 31, 2024, which the company is contesting and for which no reserve is recorded. The Middle East conflict was a roughly one-point headwind to worldwide same-store sales, and the company terminated its Turkey franchise agreements in January 2025. The company acquired 216 KFC restaurants in the U.K. and Ireland in April 2024, and sold its approximate 5% Devyani investment for $104 million pre-tax. Digital sales were $33 billion, representing over 50% of system sales.
Feb 19, 2025
2023
Yum! Brands Annual Report, Year Ended Dec 31, 2023
Yum! Brands, Inc. (YUM) reported fiscal 2023 results with total revenues of $7.08 billion, up from $6.84 billion in 2022, and GAAP operating profit of $2.32 billion versus $2.19 billion. GAAP diluted EPS rose to $5.59 from $4.57, and diluted EPS excluding Special Items was $5.17 versus $4.53. The system operated over 58,000 restaurants in more than 155 countries and territories, with 98% of units operated by franchisees. System sales reached $63.79 billion, and worldwide same-store sales grew 6% with 4,754 gross unit openings and 3,349 net new units. Company-level growth was led by the KFC and Taco Bell divisions, while Pizza Hut grew more modestly. Balance sheet and cash flow data show $11.2 billion of total debt, with approximately 94% effectively fixed-rate at an effective overall rate of about 4.6%, and a consolidated net leverage ratio of 4.2x EBITDA. Net cash provided by operating activities was $1.60 billion in 2023 versus $1.43 billion in 2022. The Board declared a quarterly dividend of $0.67 per share for March 2024, and $1.7 billion remained under the September 2022 share repurchase authorization. Shareholders' deficit was $7.86 billion. The filing highlights several risks and contingencies. The IRS has issued a Revenue Agent's Report asserting a $2.1 billion underpayment of tax plus $418 million in penalties for fiscal 2014, with interest estimated at about $1.1 billion through December 31, 2023; the company disputes the position and carries no reserve. A Middle East conflict was a low single-digit headwind to fourth-quarter same-store sales, and a January 2023 ransomware attack closed fewer than 300 restaurants in one market for one day.
Feb 20, 2024
2022
Yum! Brands Annual Report, Year Ended Dec 31, 2022
Yum! Brands, Inc. (YUM) reported 2022 total revenues of $6.84 billion, up from $6.58 billion in 2021, and GAAP diluted EPS of $4.57, down from $5.21, while diluted EPS excluding Special Items rose to $4.51 from $4.46. The system has 55,361 units across more than 155 countries and territories, and 98% of units are operated by franchisees. Worldwide system sales were $59.28 billion, and same-store sales growth was 4%. Operating profit was $2.19 billion, up from $2.14 billion. Net income was $1.33 billion, down from $1.58 billion, reflecting a higher income tax provision of $337 million versus $99 million in 2021, which the filing attributes in part to Special Items and the exit from Russia. The company's most significant near-term risk is an IRS Revenue Agent's Report asserting an underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with estimated interest of about $780 million through December 31, 2022. YUM disputes the position, has filed a protest, and states that it believes the tax position is more likely than not to be sustained, so no reserve is recorded. Total debt was approximately $11.9 billion, and the company ended 2022 with a consolidated net leverage ratio of 5.0x EBITDA. Cash from operations was $1.43 billion, and the company repurchased $1.2 billion of shares and paid $649 million in dividends. In February 2023, the board declared a quarterly dividend of $0.605 per share, a 6% increase. The filing also discloses a January 18, 2023 ransomware attack that closed fewer than 300 restaurants in one market for one day and resulted in data being taken from the network. The company exited Russia by transferring Pizza Hut Russia and agreeing in October 2022 to sell KFC Russia, and it removed 1,165 Russia units from its unit count. Management does not expect the ransomware incident to have a material adverse effect.
Feb 27, 2023
2021
Yum! Brands Annual Report, Year Ended Dec 31, 2021
Yum! Brands, Inc. (YUM) reported strong 2021 results, with GAAP diluted EPS rising 77% to $5.21 and diluted EPS excluding Special Items rising 23% to $4.46. Worldwide system sales ex-FX grew 13%, same-store sales grew 10%, and the company opened 4,180 gross units for 3,057 net new units. Total revenues increased 16% to $6.58 billion, and operating profit rose 42% to $2.14 billion. Growth was driven by a recovery from COVID-19 disruption in 2020, with drive-thru, carryout and delivery formats benefiting, and the company reported digital sales of $22 billion in 2021. The company operates over 53,000 restaurants in 157 countries, 98% of which are franchised. Its franchise-heavy, asset-light model generated operating cash flow of $1.71 billion in 2021, up from $1.31 billion in 2020. The company returned capital through $1.58 billion of share repurchases and $594 million of dividends declared, and it raised its quarterly dividend to $0.57 per share in February 2022. Total debt was $11.3 billion, with about 93% effectively fixed-rate, and the company carried a shareholders' deficit of $8.37 billion. Key risks include an IRS Notice of Proposed Adjustment tied to 2014 reorganizations involving alleged taxable distributions of approximately $6.0 billion; the filing says the resulting additional tax is expected to be material, and no reserve has been recorded. Dependence on Yum China, which pays a 3% royalty, along with an Indian regulatory penalty order of approximately $150 million that is stayed, and COVID-19 uncertainty in Asia also weigh on the outlook.
Feb 23, 2022
2020
Yum! Brands Annual Report, Year Ended Dec 31, 2020
Yum! Brands, Inc. (YUM) reported a difficult 2020 as COVID-19 closures and permanent Pizza Hut closures weighed on results. Total revenues were $5.65 billion versus $5.60 billion in 2019, while operating profit fell to $1.50 billion from $1.93 billion. GAAP diluted EPS was $2.94, down from $4.14, and diluted EPS excluding Special Items was $3.62, up from $3.55. Worldwide same-store sales declined 6%, and system sales were $50.36 billion. The filing attributes the GAAP decline largely to Special Items, including a $144 million Habit Burger Grill goodwill impairment, $50 million in charitable contributions to the Unlocking Opportunity Initiative, and $25 million for COVID-19 relief. The company ended 2020 with 50,353 units, 98% of them franchised. Net new units were flat for the year, with 2,423 openings offset by 2,516 permanent closures. Pizza Hut's unit count fell by 1,064 after 1,745 global closures, and the filing describes the closures as a headwind to Pizza Hut's 2021 unit and operating profit growth. The company acquired The Habit Restaurants, Inc. (Habit Burger Grill) for $408 million in March 2020 and sold its Grubhub stake for $206 million in the third quarter. On liquidity, cash and cash equivalents were $730 million at year end, and operating cash flow was $1.31 billion. Total debt was $10.7 billion, with about 93% effectively fixed after swaps. The Revolving Facility was fully repaid and undrawn at year end. Management expects to return to its roughly 5.0x EBITDA consolidated net leverage target by the second quarter of 2021, and it resumed share repurchases in the fourth quarter after suspending them in the first quarter. The company paid $566 million in dividends in 2020 and declared $1.88 per share.
Feb 22, 2021
2019
Yum! Brands Annual Report, Year Ended Dec 31, 2019
Yum! Brands, Inc. (YUM) reported fiscal 2019 results in its 10-K filed February 20, 2020. The company operates over 50,000 restaurants in more than 150 countries under the KFC, Pizza Hut and Taco Bell concepts, with 98% of units operated by franchisees. Total revenues were $5.60 billion in 2019 versus $5.69 billion in 2018, while GAAP operating profit fell to $1.93 billion from $2.30 billion, and GAAP diluted EPS was $4.14 versus $4.69. Excluding Special Items, diluted EPS was $3.55, and the filing states this increased 12%. Net income was $1.29 billion, and cash from operations was $1.32 billion. The filing highlights several risks. The company states that the coronavirus outbreak has significantly impacted its largest master franchisee, Yum China, with widespread store closures and sales declines, and it expects results for the quarter ending March 31, 2020 to be significantly impacted. Pizza Hut U.S. franchisee financial stress led to $22 million in bad debt expense in 2019. Total debt was approximately $10.6 billion, and the company returned $6.5 billion to shareholders from 2017 through 2019. It also disclosed a pending $375 million acquisition of The Habit Restaurants, Inc. and a Indian enforcement order imposing a penalty of about $156 million, which it is contesting. For investors, the 2019 story is a smaller reported top line and lower GAAP profit, offset by strong same-store sales and core operating profit growth of 12%. Results were shaped by lower refranchising gains and a sizable Grubhub mark-to-market loss, with the effective tax rate at 5.7%. The main near-term uncertainty is the coronavirus impact on China royalties and the financial health of certain U.S. Pizza Hut franchisees.
Feb 20, 2020
2018
Yum! Brands Annual Report, Year Ended Dec 31, 2018
YUM! Brands, Inc. reported 2018 total revenues of $5.69 billion, down from $5.88 billion in 2017, as the company continued its Strategic Transformation Initiatives and became 98% franchised by December 31, 2018. Company sales fell to $2.00 billion from $3.57 billion, reflecting refranchising of 660 restaurants during the year for pre-tax proceeds of $825 million. Operating Profit declined to $2.30 billion from $2.76 billion, largely because 2017 included larger refranchising gains ($540 million in 2018 versus $1.08 billion in 2017). GAAP diluted EPS from continuing operations rose to $4.69 from $3.77, while diluted EPS excluding Special Items increased to $3.17 from $2.96. System sales reached $49.24 billion, and the company adopted Topic 606 on January 1, 2018, which affected how upfront franchise fees and advertising contributions are presented. The company returned capital to shareholders, repurchasing 28.2 million shares for $2.39 billion and paying $462 million in dividends. Total debt was $10.07 billion at year end, with approximately 91% effectively fixed-rate at an effective overall interest rate of about 4.7%. Management said it targets about 5.0x EBITDA leverage, cut annual capital expenditures to about $100 million in 2019 as planned, and set a G&A target of 1.7% of system sales for 2019. The company disclosed the Telepizza strategic alliance, under which Telepizza became master franchisee of Pizza Hut in Latin America and portions of Europe, adding 1,282 units at year end. The filing highlights ongoing dependence on Yum China as its largest franchisee and royalty source, along with exposure to currency movements, a KFC U.K. supply disruption in 2018, and a 2018 effective tax rate of 16.2% that was lowered by Tax Act-related items. Net cash provided by operating activities from continuing operations was $1.18 billion, compared with $1.03 billion in 2017.
Feb 21, 2019
2017
Yum! Brands Annual Report, Year Ended Dec 31, 2017
YUM! Brands, Inc. reported fiscal 2017 GAAP diluted EPS from continuing operations of $3.77, up from $2.54 in 2016, with diluted EPS from continuing operations excluding Special Items of $2.96. Total revenues were $5.88 billion versus $6.36 billion in 2016, while Operating Profit rose to $2.76 billion from $1.68 billion, largely reflecting $1.08 billion of net refranchising gains. Net income was $1.34 billion. The company operated 45,084 system units at year end, with 97% franchised as stated in the MD&A, and continued its Strategic Transformation Initiatives, which target at least 98% franchise ownership by the end of 2018, annual capital expenditures of about $100 million in 2019, and G&A of 1.7% of system sales in 2019. Capital returns and balance sheet changes were significant. The company returned $2.4 billion to shareholders in 2017 through repurchases and dividends and remains committed to returning $6.5 to $7.0 billion from 2017 through 2019. Total debt was $9.8 billion, about 90% effectively fixed after interest rate swaps, and the company had a stated effective interest rate of about 4.7%. Operating cash flow from continuing operations declined to $1.03 billion from $1.25 billion, mainly due to higher interest payments. Cash and cash equivalents rose to $1.52 billion at year end. The filing also highlights risks and developments that investors should weigh. The Tax Act resulted in a provisional charge of $434 million, and the company now expects an ongoing effective tax rate of 20 to 22%. Yum China, the largest franchisee, remains a key dependency, and supply issues at about 900 KFC restaurants in the UK and Ireland, beginning February 14, 2018, have caused some closures and limited menus. In February 2018 the company agreed to invest $200 million in Grubhub stock to support digital delivery for KFC and Taco Bell.
Feb 22, 2018
2016
Yum! Brands Annual Report, Year Ended Dec 31, 2016
YUM! Brands, Inc. reported fiscal 2016 total revenues of $6.37 billion, Operating Profit of $1.63 billion (up from $1.40 billion in 2015), and net income of $1.62 billion, including $625 million from discontinued operations tied to the October 31, 2016 spin-off of its China business into Yum China Holdings, Inc. (NYSE: YUMC). Diluted EPS from continuing operations was $2.48, and diluted EPS from continuing operations excluding Special Items was $2.45. Fiscal 2016 contained 53 weeks, which added an estimated $76 million to revenues and $27 million to Operating Profit. The company's stated strategy, announced October 11, 2016, is to be more focused, more franchised (at least 98% franchised by the end of 2018), and more efficient, including reducing annual capital expenditures to approximately $100 million in 2019. The company's capital structure changed substantially in 2016. Total debt rose to $9.13 billion from $3.93 billion, and shareholders' equity moved to a deficit of $5.66 billion, driven by $5.4 billion in share repurchases and the China spin-off. The filing states that the company now holds non-investment grade ratings of BB (Standard & Poor's) and Ba3 (Moody's). Management intends to return an additional $6.5 to $7.0 billion to shareholders over the next three years, funded by free cash flow, refranchising proceeds (expected to exceed $2 billion net of tax), and maintenance of about five times EBITDA leverage. The filing highlights concentration and transition risks. Yum China is now the largest franchisee and pays a 3% license fee on system sales in mainland China, and fiscal 2016 franchise fee revenue from Yum China was approximately $240 million. The company also faces a possible Chinese indirect transfer tax on the spin-off, which the filing says could be significant if challenged. Operating cash flow from continuing operations was $1.20 billion in 2016, compared with $1.21 billion in 2015.
Feb 22, 2017
2015
Yum! Brands Annual Report, Year Ended Dec 26, 2015
YUM! Brands, Inc. ended fiscal 2015 with over 42,000 restaurants in more than 130 countries and territories, operated under the KFC, Pizza Hut and Taco Bell brands. Diluted EPS was $2.92 on reported net income attributable to YUM of $1.29 billion, up from $2.32 in 2014, while diluted EPS before Special Items rose 3% to $3.18. Total revenues were $13.105 billion versus $13.279 billion in 2014, and Operating Profit increased to $1.921 billion from $1.557 billion. The filing attributes the 2015 EPS shortfall against the company's 10% growth target to weaker-than-expected China Division sales and profits, along with adverse foreign currency translation that reduced EPS growth by 6 percentage points. The central strategic event is the planned spin-off of the China business into an independent, publicly traded company by the end of 2016. Upon completion, YUM expects to become a more "pure play" franchisor, and the new China entity will become a licensee of YUM. Alongside this, the company intends to return approximately $6.2 billion of capital to shareholders before the spin-off, mostly funded by incremental borrowings. Total debt rose to $3.977 billion at year end from $3.344 billion, and the company stated it is transitioning to a non-investment grade credit rating after Standard & Poor's (BB) and Moody's (Ba3) downgraded it. Shareholders received $730 million in dividends and $1.2 billion in share repurchases during 2015. Investors should weigh the higher leverage and spin-off execution risk, including a potential China indirect transfer tax under PRC Bulletin 7, against the company's cash generation, with net cash provided by operating activities of $2.139 billion. Restaurant margin improved to 16.0% from 14.5%, and system sales grew 5% excluding foreign exchange.
Feb 16, 2016
2014
Yum! Brands Annual Report, Year Ended Dec 27, 2014
YUM! Brands, Inc. reported fiscal 2014 total revenues of $13.28 billion, up from $13.08 billion in 2013, but Operating Profit fell to $1.56 billion from $1.80 billion, driven largely by $463 million of Little Sheep impairment charges. Reported diluted EPS was $2.32 versus $2.36 in 2013, while diluted EPS before Special Items rose to $3.09 from $2.97. The filing attributes the China Division's weaker performance to adverse publicity in July 2014 surrounding improper food handling practices by a former supplier, after which China same-store sales declined 5% for the full year and KFC China same-store sales fell 18% in the fourth quarter. Outside China, the KFC Division grew system sales 6% excluding FX and Operating Profit 13%, the Taco Bell Division grew system sales 4% and Operating Profit 5%, and the Pizza Hut Division grew system sales 1% while Operating Profit declined 13%. The company operated over 41,000 restaurants in more than 125 countries and territories, with 79% operated by franchisees, licensees or unconsolidated affiliates. Management projects 2015 EPS before Special Items to grow at least 10%, including an expected negative FX impact of approximately $75 million. Cash generation remained strong, with operating cash flow of $2.05 billion, capital spending of $1.03 billion, $820 million in share repurchases and $669 million in dividends paid. Remaining repurchase capacity was $1.1 billion, and the company held a $1.3 billion revolving credit facility with $416 million drawn at year end. The filing also discloses the reaching of a final agreement with the IRS Appeals Division on an intangibles valuation dispute, under which the company paid $200 million.
Feb 17, 2015
2013
Yum! Brands Annual Report, Year Ended Dec 28, 2013
YUM! Brands, Inc. reported fiscal 2013 total revenues of $13.08 billion and Operating Profit of $1.80 billion, down from $2.29 billion in 2012, with net income attributable to YUM! Brands of $1.09 billion and diluted EPS of $2.36 (versus $3.38 in 2012). Diluted EPS before Special Items was $2.97, down from $3.25. The decline was driven primarily by a $295 million non-cash Little Sheep impairment (Special Items), a $120 million loss on the extinguishment of debt, and a 26% decline in China Division Operating Profit, excluding foreign currency, following the December 2012 poultry supply incident and subsequent avian flu media attention. China same-store sales declined 13% for the year, while YRI same-store sales grew 1% and U.S. same-store sales were flat. Cash flow from operations was $2.14 billion in 2013, versus $2.29 billion in 2012. The company returned capital through $770 million of share repurchases and $615 million of dividends paid, and it had $953 million of remaining repurchase authorization at year end. The company targets a dividend payout ratio of 35% to 40% of net income and had approximately $1.2 billion of unused capacity under its $1.3 billion revolving credit facility. Management expects 2014 EPS before Special Items to grow at least 20% and China Division Operating Profit to return to more than $1 billion, and it plans to combine YRI and U.S. into KFC, Pizza Hut and Taco Bell global divisions beginning in the first quarter of 2014. The filing also flags material risks. The IRS has proposed adjustments on intangible-property transfers that would add approximately $700 million of taxes plus about $255 million of net interest for fiscal 2004-2006, with further proposed adjustments for 2007-2008 of about $270 million plus $40 million of interest. In addition, a January 2014 administrative law ruling could suspend the Chinese affiliate of the company's auditor, which management considers remote but which could affect timely filings. The company also faces a securities class action and shareholder derivative suits related to China supply chain disclosures.
Feb 18, 2014
2012
Yum! Brands Annual Report, Year Ended Dec 29, 2012
YUM! Brands, Inc. (YUM) reported fiscal 2012 total revenues of $13.63 billion, up from $12.63 billion in 2011, and Operating Profit of $2.29 billion versus $1.82 billion. Reported diluted EPS was $3.38 (diluted EPS before Special Items was $3.25), and Net Income attributable to YUM was $1.60 billion. Results were helped by a $122 million U.S. refranchising gain, a $74 million non-cash gain on the acquisition of Little Sheep, and the $84 million YUM Retirement Plan settlement charge. Operating cash flow was $2.29 billion and capital spending was $1.10 billion. The company returned cash through $965 million of share repurchases and $544 million of dividends paid. China was the largest growth driver, with China Division Operating Profit of $1.015 billion and revenues of approximately $6.9 billion. The filing discloses a serious near-term risk: China same-store sales turned sharply negative in late December 2012 after a poultry supply investigation by the Shanghai FDA. January 2013 estimated same-store sales declined 37% for the China Division. Management stated that it expects China Operating Profit to be negative versus the prior year in 2013 and that EPS, excluding Special Items, will decline by a mid-single digit percentage, which reverses its prior expectation of at least 10% EPS growth for 2013. The filing also highlights other exposures, including a proposed IRS adjustment that would result in approximately $700 million of additional taxes plus net interest of about $220 million for fiscal years 2004-2006, with a further approximately $270 million of additional taxes for 2007-2008 and securities class actions filed in January 2013 relating to China disclosures. The company's Board authorized up to $1 billion of additional share repurchases in November 2012, with $953 million remaining as of December 29, 2012.
Feb 20, 2013
2011
Yum! Brands Annual Report, Year Ended Dec 31, 2011
YUM! Brands, Inc. reported fiscal 2011 total revenues of $12.63 billion (up from $11.34 billion in 2010) and Operating Profit of $1.82 billion, with Net Income attributable to YUM! Brands of $1.32 billion and diluted EPS of $2.74 (diluted EPS before Special Items of $2.87). Fiscal 2011 included a 53rd week that added $91 million to revenues and $25 million to Operating Profit. The results were weighed down by Special Items totaling $187 million of pre-tax expense, largely tied to the sale of the Long John Silver's and A&W brands, U.S. refranchising, and refranchising of equity markets outside the U.S. Company sales rose to $10.89 billion, and China and YRI together represented more than 70% of Operating Profit excluding unallocated items. Operating Profit in the U.S. declined to $589 million from $668 million. Cash generation remained strong, with net cash provided by operating activities of $2.17 billion, capital spending of $940 million, $752 million in share repurchases, and $481 million in dividends paid. The Board authorized an additional $750 million share repurchase program in November 2011, and the Company reported approximately $938 million of remaining repurchase capacity at year end. Total debt was $3.32 billion, and cash and cash equivalents were $1.20 billion. The Company also disclosed that on February 1, 2012 it paid $584 million to acquire an additional 66% interest in Little Sheep, raising its ownership to approximately 93%, and that the IRS has proposed adjustments that could result in approximately $700 million of additional taxes plus net interest of approximately $170 million for fiscal years 2004 through 2006, which the Company is contesting. The filing's principal risks for investors center on China and other international exposure, franchisee financial health, the pace of refranchising, commodity and labor costs, and the unresolved IRS matter. Management's stated long-term targets include China system sales growth of at least 13% and an annual dividend payout ratio of 35% to 40% of net income.
Feb 21, 2012
2010
Yum! Brands Annual Report, Year Ended Dec 25, 2010
YUM! Brands, Inc. reported fiscal 2010 (52 weeks ended December 25, 2010) with total revenues of $11.34 billion, up from $10.84 billion in 2009, and Operating Profit of $1.77 billion versus $1.59 billion. Net Income attributable to YUM! Brands was $1.16 billion, or $2.38 per diluted share, compared with $2.22 in 2009. Excluding Special Items, diluted EPS was $2.53, up from $2.17. Special Items in 2010 totaled a net expense of $77 million pre-tax, driven mainly by U.S. refranchising losses and losses from refranchising the Mexico and Taiwan equity markets. Worldwide system sales grew 4% before foreign currency translation, with China up 17% and YRI up 4%. Net cash provided by operating activities was $1.97 billion, compared with $1.40 billion in 2009. The company is shifting toward a franchise-heavy model. It reports 37,835 system units, of which 19% are company-operated, 75% franchisee or unconsolidated affiliate-operated, and 6% licensee-operated. Company-owned U.S. KFC, Pizza Hut and Taco Bell ownership is targeted to fall to about 12% from 15%. In 2010 the company refranchised 949 units and recorded a $63 million refranchising loss. In January 2011 it decided to sell Long John Silver's and A&W, which it expects will produce a non-cash pre-tax impairment loss in the first quarter of 2011. Balance sheet items include $1.43 billion in cash, $3.59 billion in total debt, and a $0.92 per share dividend declared for 2010. In January 2011 the board authorized up to $750 million in additional share repurchases. Key risks flagged in the filing include an IRS proposed adjustment that could add approximately $700 million in taxes plus about $150 million of net interest for fiscal 2004 through 2006, with a similar claim of about $320 million plus $20 million of interest for later years, which the company is contesting. Other risks include wage-and-hour class actions, particularly at Taco Bell, and negative publicity from a January 2011 lawsuit over Taco Bell's beef advertising, which the company says has adversely affected Taco Bell sales.
Feb 15, 2011
2009
Yum! Brands Annual Report, Year Ended Dec 26, 2009
YUM! Brands, Inc. reported fiscal 2009 total revenues of $10.84 billion, down from $11.30 billion in 2008, and Operating Profit of $1.59 billion, up from $1.52 billion. Diluted EPS was $2.22 (2008: $1.96), and diluted EPS before Special Items was $2.17 (2008: $1.91). Net Income attributable to YUM! Brands was $1.07 billion. Results were shaped by foreign currency translation, refranchising of U.S. stores, and the consolidation of a former unconsolidated affiliate in Shanghai, China, which produced a $68 million gain. Net cash provided by operating activities was $1.40 billion, and capital spending was $797 million. The company operates more than 37,000 units in over 110 countries through the KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W concepts, with about 21% company-operated and 73% franchisee- or affiliate-operated. The China Division and International Division represented more than 60% of operating profit. U.S. same store sales declined 5% and worldwide system sales growth was 1% before foreign currency translation. The company is pursuing a refranchising program that would reduce company ownership in the U.S. from about 16% to potentially below 10% by the end of 2011, and it expects to refranchise about 500 U.S. restaurants in 2010. Capital returns were limited in 2009: no shares were repurchased, and dividends paid totaled $362 million. The company made a $280 million contribution to its pension plans, and it resumed share repurchases after year end under a $300 million authorization expiring in September 2010. The company targets a dividend payout ratio of 35% to 40% of net income and holds investment-grade ratings of BBB- from S&P and Baa3 from Moody's.
Feb 17, 2010
2008
Yum! Brands Annual Report, Year Ended Dec 27, 2008
YUM! Brands, Inc. (YUM) reported fiscal 2008 total revenues of $11.28 billion, up from $10.42 billion in 2007, and Operating Profit of $1.51 billion versus $1.36 billion. Net income was $964 million, compared with $909 million in 2007, and diluted earnings per share were $1.96 versus $1.68. The company describes itself as the world's largest quick service restaurant company by system units, with more than 36,000 units in more than 110 countries and territories. Growth was led by the China Division, where Operating Profit rose to $469 million from $375 million, and the YRI (International Division) reached $528 million from $480 million. U.S. Operating Profit declined to $694 million from $739 million, which the filing attributes to higher restaurant operating costs, particularly commodity costs. The filing shows a sharp shift in the balance sheet and cash flows. Shareholders' equity moved to a deficit of $108 million at year end from equity of $1.14 billion a year earlier, driven primarily by about $2 billion returned to shareholders through share repurchases and dividends. Total debt rose to $3.59 billion from $3.21 billion, and cash and cash equivalents fell to $216 million from $789 million. Net cash provided by operating activities was $1.52 billion. Management stated it does not currently plan to repurchase shares in 2009, expects capital spending of about $900 million in 2009, and says it does not expect to need to access credit markets during 2009. The company is pursuing a U.S. refranchising program, targeting Company ownership of U.S. restaurants of potentially below 10% by year end 2010, down from 19% at year end 2008, with about 500 U.S. refranchisings expected in 2009. The filing also discloses ongoing wage-and-hour and disability access litigation at Taco Bell, KFC and LJS, and an E. coli outbreak lawsuit tied to Taco Bell restaurants in late 2006. The filing states management believes the ultimate liability in these matters is not likely to have a material adverse effect on annual results, though the Taco Bell California wage-and-hour and LJS Cole Arbitration matters carry uncertain outcomes.
Feb 23, 2009
2008
Yum! Brands Annual Report, Year Ended Jan 28, 2008
YUM! Brands, Inc. (YUM) reported fiscal 2007 results with total revenues of $10.42 billion, up from $9.56 billion in 2006, and operating profit of $1.36 billion versus $1.26 billion. Net income rose to $909 million from $824 million, and diluted earnings per share were $1.68 compared with $1.46. Company sales were $9.10 billion, and franchise and license fees were $1.32 billion. Cash provided by operating activities was $1.57 billion, and the Company returned approximately $1.7 billion to shareholders through share repurchases and dividends during the year. Growth was driven by China and the International Division, which together now represent over half of operating profit. The China Division's operating profit was $375 million and the International Division's was $480 million, while the U.S. operating profit was $739 million and declined in the year. U.S. Company same-store sales fell 3%, with Taco Bell's Company same-store sales down 5% following the late-2006 E. coli outbreak and produce-sourcing issues. Management expects commodity inflation of approximately 5% in 2008 and plans to refranchise U.S. restaurants so that Company ownership falls potentially below 10% by the end of 2010. Looking to 2008, the Company expects to return over $2 billion to shareholders, including a reduction of approximately 8% in average diluted shares, and it expects to record an approximately $87 million pre-tax gain on the sale of its Japan unconsolidated affiliate in the first quarter. Total debt rose to $3.21 billion from $2.27 billion, reflecting $600 million of 6.25% notes due 2018 and $600 million of 6.875% notes due 2037 issued in October 2007.
Feb 25, 2008
2006
Yum! Brands Annual Report, Year Ended Dec 31, 2006
YUM! Brands, Inc. reported fiscal 2006 total revenues of $9.56 billion (up 2% from $9.35 billion in 2005) and operating profit of $1.26 billion, with net income of $824 million and diluted earnings per share of $2.92, up 14%. The company is the world's largest quick service restaurant company by system units, with more than 34,000 units in over 100 countries. Growth was led by the China Division, where operating profit rose 37% to $290 million on system sales growth of 26% reported, and the International Division, which generated $407 million in operating profit and opened 785 new restaurants. U.S. same store sales were flat in 2006, and Taco Bell faced an E. coli outbreak in the northeast in late 2006 that the company estimated reduced operating profit by $20 million in the fourth quarter. Capital returns were a major focus. The company repurchased 20.2 million shares for $983 million and paid $144 million in dividends, extending a second consecutive year of over $1.1 billion returned to shareholders. Management said the quarterly dividend would double in the second quarter of 2007 and that it expects an approximate 2% dividend yield. For 2007 it estimates capital spending of about $650 million and targets a 3% to 4% reduction in its diluted share count. Long-term debt rose to $2.05 billion from $1.65 billion, and cash from operations was $1.30 billion. The filing also details ongoing legal exposure. The Long John Silver's Cole Arbitration seeks class treatment of wage and hour claims, with a Fourth Circuit oral argument held January 31, 2007, and the Taco Bell disability access lawsuit in California remains at an early stage with costs not estimable. The company has provided reserves for the Taco Bell E. coli litigation but states that losses could exceed those reserves.
Feb 28, 2007
2006-A
Yum! Brands Annual Report (Amendment), Year Ended Mar 31, 2006
This Form 10-K/A (Amendment No. 1) from Yum! Brands, Inc. amends the Annual Report for the fiscal year ended December 31, 2005, originally filed with the SEC on March 3, 2006. The filing states its sole purpose is to correct a typographical error on the cover page regarding the date of the annual meeting of shareholders, which is to be held May 18, 2006. It does not update any disclosures to reflect developments since the Original Filing, and it does not amend or change the financial statements or any other items. The amendment adds four certifications: Exhibits 31.1 and 31.2 (Rule 13a-14(a) certifications under Section 302 of the Sarbanes-Oxley Act, by the Chairman, CEO and President and the Chief Financial Officer) and Exhibits 32.1 and 32.2 (Section 906 certifications under 18 U.S.C. Section 1350, by the same officers). The filing is signed by David C. Novak, Chairman, Chief Executive Officer and President, dated March 31, 2006. Cover-page information shows the registrant is a North Carolina corporation headquartered at 1441 Gardiner Lane, Louisville, Kentucky, is a large accelerated filer, and had 275,830,856 shares of Common Stock outstanding as of February 24, 2006. The aggregate market value of voting stock held by non-affiliates was $15,137,243,884 as of June 11, 2005. Part III information is incorporated by reference from the definitive proxy statement.
Apr 3, 2006
2006
Yum! Brands Annual Report, Year Ended Mar 2, 2006
YUM! Brands, Inc. reported fiscal 2005 total revenues of $9.35 billion, up from $9.01 billion in 2004, and operating profit of $1.15 billion, essentially flat versus $1.16 billion in 2004. Net income rose to $762 million from $740 million, and diluted EPS increased to $2.55 from $2.42. The company operates KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W, with over 34,000 units in more than 100 countries and territories. Fiscal 2005 included a 53rd week, which added $96 million to revenues and $23 million to operating profit, and the adoption of SFAS 123R reduced net income by $38 million, or $0.13 per diluted share. Cash generation remained strong, with net cash provided by operating activities of $1.24 billion versus $1.19 billion in 2004. The company returned capital to shareholders through $1.06 billion of share repurchases and $123 million of dividends paid. Management is targeting a dividend payout of 15% to 20% of net income, and a $500 million repurchase program authorized in November 2005 had $469 million remaining at year end. China Division system sales growth slowed to 11% excluding currency translation, below the company's ongoing target of at least 22%, due to a supplier ingredient issue and avian flu concerns. Key legal exposures include the Cole Arbitration and related wage-and-hour claims at Long John Silver's, a disability access class action against Taco Bell covering approximately 220 California restaurants, and the Coldiron FLSA matter at Pizza Hut, which the company has provided for. Total debt was $1.86 billion at year end, and the company had $809 million of unused capacity under its $1.0 billion Credit Facility.
Mar 3, 2006
2004
Yum! Brands Annual Report, Year Ended Dec 25, 2004
YUM! Brands, Inc. (the Company) reported fiscal 2004 (52 weeks ended December 25, 2004) revenues of $9.01 billion, up from $8.38 billion in 2003, and net income of $740 million, up from $617 million. Diluted earnings per share rose to $2.42 from $2.02. Operating profit was $1.155 billion versus $1.059 billion, helped by a $14 million Wrench litigation income item in 2004 compared with $42 million of expense in 2003. Worldwide system sales grew 8% reported and 5% excluding currency translation. The Company operates over 33,000 units in more than 100 countries, with KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W as its five Concepts. Cash generation remained strong, with net cash provided by operating activities of $1.131 billion. The Company repurchased $569 million of common stock during 2004 and, for the first time, paid quarterly dividends, declaring $0.30 per share in total and targeting a payout ratio of 15% to 20% of net income. Long-term debt fell to $1.731 billion from $2.056 billion, partly due to the early redemption of $350 million of 2005 Notes. The Company also recorded a lease accounting adjustment of $11.5 million ($7 million after tax) in the fourth quarter, and a Puerto Rico business sale on October 4, 2004. Key risks disclosed include commodity inflation, which reduced U.S. restaurant margins by approximately 160 basis points, and pending litigation. In the Coldiron case, Pizza Hut's restaurant general managers were challenged over exempt classification under the FLSA, and the outcome cannot be predicted. In the Moeller case, Taco Bell faces a class action over accessibility of approximately 220 California company restaurants, and the cost of compliance cannot be reasonably estimated.
Feb 28, 2005
2003
Yum! Brands Annual Report, Year Ended Dec 27, 2003
YUM! Brands, Inc. (filed as YUM! Brands, Inc., formerly TRICON Global Restaurants, Inc.) reported fiscal 2003 (ended December 27, 2003) net income of $617 million, or $2.02 diluted earnings per share, versus $583 million and $1.88 in 2002. Total revenues rose to $8.38 billion from $7.76 billion, driven by Company sales of $7.44 billion and franchise and license fees of $939 million. Operating profit was $1.06 billion, including a $42 million Wrench litigation charge. The company operated 33,199 system units worldwide, of which about 24% were Company-operated, and system sales grew 7% (3% excluding currency translation and the YGR acquisition). Company restaurant margin declined to 14.8% of Company sales from 16.0% in 2002, with U.S. margin falling to 14.6%. Cash flow from operations was $1.05 billion, compared with $1.09 billion in 2002, reflecting $130 million of voluntary pension contributions. Capital spending was $663 million, and the company repurchased $278 million of common stock. Total debt was $2.07 billion at year-end, and the $1.0 billion revolving Credit Facility had no borrowings outstanding. The company did not pay common stock dividends in the past. The 2003 effective tax rate fell to 30.2% from 32.1%, aided by a 4.1-point benefit from amended prior-year U.S. returns that management describes as non-recurring. Management highlighted several 2004 items: an expected increase of about $165 million in Company sales and a decrease of about $10 million in franchise fees from the Canada unconsolidated affiliate dissolution, a pension expense increase of about $14 million to $54 million, and a potential avian flu impact of up to $0.02 of diluted EPS if China sales declined 20% through March 2004. The company also disclosed a Wrench litigation judgment that it has appealed, and it expects capital spending of about $770 million in 2004.
Mar 5, 2004
2002
Yum! Brands Annual Report, Year Ended Dec 28, 2002
YUM! Brands, Inc. (filed as TRICON Global Restaurants, Inc. until a May 16, 2002 name change) reported fiscal 2002 results for the year ended December 28, 2002. Total revenues rose to $7.76 billion from $6.95 billion, and net income increased to $583 million from $492 million, with diluted EPS of $1.88 versus $1.62. The growth was driven in large part by the May 7, 2002 acquisition of Yorkshire Global Restaurants (parent of Long John Silver's and A&W), which cost approximately $275 million in cash. System sales reached $24.22 billion, and the company operated nearly 33,000 units in over 100 countries, with 11,798 international units. Operating cash flow was $1.09 billion, compared with $832 million in 2001, while capital spending was $760 million. The company repurchased about $228 million of common stock during 2002 and authorized a new $300 million buyback program in November 2002. Total debt was $2.45 billion at year-end, and shareholders' equity rose to $594 million from $104 million. The company does not pay dividends on its common stock. Key risk items disclosed include contingent lease liabilities of $278 million (present value), a Taco Bell wage-and-hour class action (Bravo) with damages still pending for 938 claimants, the Wrench advertising lawsuit set for trial in 2003, and an underfunded pension plan with a $250 million shortfall against the projected benefit obligation. Management states that franchisee financial issues are not expected to be material.
Mar 11, 2003
2001
Yum! Brands Annual Report, Year Ended Dec 29, 2001
TRICON Global Restaurants, Inc. (filed as TRICON; now Yum! Brands, Inc.) reported fiscal 2001 system sales of $22.33 billion, up from $22.16 billion in 2000, and revenues of $6.95 billion, down from $7.09 billion. Net income rose to $492 million ($3.24 diluted EPS) from $413 million ($2.77 diluted EPS in 2000). Operating profit was $891 million, and the company describes ongoing operating profit of $889 million, flat versus $888 million in 2000. The company substantially completed its refranchising program in 2001, selling 233 units, which reduced Company sales and restaurant margin dollars while raising the share of system units operated by franchisees and licensees. The company operates 30,489 units across KFC, Pizza Hut and Taco Bell, with 10,927 international units. Operating cash flow improved to $832 million from $491 million, mainly due to collection of receivables established in 2000 and the absence of 2000 AmeriServe-related charges. Capital spending was $636 million. Total debt was $2.25 billion at year-end, and shareholders' equity turned positive at $104 million from a deficit of $322 million. Short-term borrowings of $696 million include $536 million of Credit Facilities maturing in October 2002, which management says it is negotiating to replace. The company issued $850 million of senior unsecured notes in 2001 and cut its revolving facility from $3.0 billion to $1.75 billion in February 2002. The filing states that the company does not presently intend to pay dividends. Key risks disclosed include the Taco Bell Bravo wage-and-hour litigation, where a damages trial for 93 claimants began in February 2002; the Wrench lawsuit, whose outcome the company says cannot be predicted; franchisee financial difficulties, mainly at Taco Bell; and potential tax indemnities to PepsiCo related to the Spin-off.
Mar 11, 2002
2000-A
Yum! Brands Annual Report (Amendment), Year Ended Dec 30, 2000
Tricon Global Restaurants, Inc. (now Yum! Brands, Inc.) reported fiscal 2000 (53 weeks ended December 30, 2000) with system sales of $22.16 billion, up 2% from $21.76 billion in 1999, and total revenues of $7.09 billion, down 9% from $7.82 billion. Operating profit fell to $860 million from $1.24 billion, while ongoing operating profit rose 1% to $888 million. Net income declined to $413 million, or $2.77 per diluted share, from $627 million, or $3.92 per diluted share, in 1999. The decline was driven largely by $204 million of unusual items, including $170 million tied to the AmeriServe bankruptcy reorganization, and by the refranchising program, which reduced Company sales by 11%. U.S. same-store sales were down 2% on a blended basis, with KFC down 3%, Pizza Hut up 1%, and Taco Bell down 5%. Management flagged financial stress among Taco Bell franchisees, many of whom face restructuring, and noted that Kraft's recall of corn taco shells likely hurt Taco Bell sales. The company reported shareholders' deficit of $322 million, a total debt balance of $2.49 billion, and a working capital deficit of $634 million. It also authorized a new $300 million share repurchase program over two years and stated it does not presently intend to pay dividends. The filing is an amendment (10-K/A) that adds Part II Item 9 and Part III Items 10 through 13, which incorporate information by reference from the 2001 proxy statement. The company expects to substantially complete its refranchising program in 2001 and plans to refinance a portion of its credit facilities with public bonds, which it expects will raise interest rates.
Apr 5, 2001
2000
Yum! Brands Annual Report, Year Ended Dec 30, 2000
Tricon Global Restaurants, Inc. (now Yum! Brands, Inc.) reported fiscal 2000 (53 weeks ended December 30, 2000) with system sales of $22.16 billion, up 2% from $21.76 billion in 1999, and total revenues of $7.09 billion, down 9% from $7.82 billion. Net income fell to $413 million, or $2.77 per diluted share, from $627 million, or $3.92 per diluted share in 1999. Operating profit was $860 million versus $1.24 billion. Ongoing operating profit rose 1% to $888 million, while unusual items of $204 million, largely tied to the AmeriServe bankruptcy, weighed on reported results. The company is refranchising restaurants, which it expects to substantially complete in 2001, and the Portfolio Effect reduced Company sales by $1.08 billion in 2000. The Taco Bell franchise system faces financial stress tied to declining same-store sales and the Kraft taco shell recall. The company charged about $26 million to ongoing operating profit for franchisee-related expenses and has a $15 million loan program for franchisees. U.S. Company same-store sales declined 2% blended, with KFC down 3%, Pizza Hut up 1%, and Taco Bell down 5%. Total debt stood at $2.49 billion at year-end, with a $1.8 billion unused revolving credit facility, and the company announced a new $300 million share repurchase program in February 2001. The company does not intend to pay dividends. The filing also details ongoing wage and hour class actions at Pizza Hut and Taco Bell, with a Taco Bell verdict issued in March 2001 that was mixed for the company. Management states it believes the company has adequate financial resources to meet its requirements in 2001 and beyond.
Mar 28, 2001
1999
Yum! Brands Annual Report, Year Ended Dec 25, 1999
Tricon Global Restaurants, Inc. reported 1999 system sales of $21.8 billion (up 6% from 1998) and total revenues of $7.82 billion, down 8% as refranchising reduced Company sales to $7.10 billion. Operating profit rose 21% to $1.24 billion and diluted EPS was $3.92 versus $2.84 in 1998, helped by $381 million of facility actions net gains and $29 million of favorable accounting changes. Ongoing operating profit grew 15% to $881 million, and net income increased to $627 million. Company ownership of system units fell to 23% at year-end 1999, and the company says it expects to refranchise roughly 500 to 600 restaurants in 2000, versus over 1,400 in 1999, so refranchising gains are expected to be significantly lower. The filing's most significant risk factor is the January 31, 2000 Chapter 11 filing by AmeriServe Food Distribution, the company's primary U.S. food distributor. Tricon wrote off about $41 million of receivables, committed up to $70 million to a $150 million debtor-in-possession facility, and began a temporary direct purchase program for supplies. The company says it believes it can arrange alternative distribution if needed but cannot predict the ultimate impact. Balance sheet items show total debt of $2.51 billion, long-term debt of $2.39 billion, and a shareholders' deficit of $560 million at year-end 1999, down from $3.53 billion in total debt in 1998. The company reports it does not presently intend to pay dividends.
Mar 6, 2000
1998-A
Yum! Brands Annual Report (Amendment), Year Ended Dec 26, 1998
Tricon Global Restaurants, Inc. filed this Form 10-K/A (Amendment Number 1) for the fiscal year ended December 26, 1998, on March 23, 1999. The filing is a narrow amendment and contains no financial statements, operating results, or business discussion. Its stated purpose is to add the Rights to Purchase Series A Participating Preferred Stock to the securities registered under Section 12(b) of the Act and to update the shares-outstanding figure to March 18, 1999. The registrant is headquartered in Louisville, Kentucky, and its common stock trades on the New York Stock Exchange. The filing reports an aggregate market value of voting stock held by non-affiliates of $10,587,855,903, computed as of March 18, 1998, and 153,447,187 shares of common stock outstanding as of that same date. The cover page states that the amended share count is as of March 18, 1999, though the figure shown is 153,447,187 shares. Portions of the definitive proxy statement for the annual meeting of shareholders on May 20, 1999, are incorporated by reference into Part III. Investors seeking operating, financial, or strategic information should refer to the original 10-K and the other filings the company made for the period.
Mar 24, 1999
1998
Yum! Brands Annual Report, Year Ended Dec 26, 1998
Tricon Global Restaurants, Inc. reported fiscal 1998 (year ended December 26, 1998) net income of $445 million, or $2.84 per diluted share, compared with a net loss of $111 million in 1997. Operating profit rose to $1,028 million from $241 million, aided by a $275 million facility actions net gain, including $54 million of favorable adjustments to the 1997 fourth-quarter charge. Revenues fell to $8,468 million from $9,685 million, reflecting refranchising of 1,389 restaurants in 1998 and the portfolio strategy of shifting toward franchisee ownership. System sales were roughly flat at $20.6 billion, and ongoing operating profit increased to $768 million from $672 million. The company is the world's largest quick service restaurant company by number of system units, with almost 30,000 units in 101 countries across its KFC, Pizza Hut and Taco Bell concepts. Company ownership fell to 32% of system units at year-end 1998. Debt declined to $3.53 billion from $4.68 billion, as net cash used for financing of $1.12 billion went largely to repaying bank term and revolving debt. Operating cash flow was $674 million, down from $810 million, and management expects combined operating and refranchising cash flow in 1999 to be lower than in 1998 because of reduced refranchising. Key risks disclosed include Year 2000 remediation (estimated total cost of $62 to $65 million, up from $40 to $45 million), pending wage-and-hour class actions at Pizza Hut and Taco Bell, unfinished disposal of 531 units from the 1997 charge, and a restriction on dividends under the bank credit facility, so the company does not intend to pay dividends.
Mar 23, 1999
1997
Yum! Brands Annual Report, Year Ended Dec 27, 1997
Tricon Global Restaurants, Inc. (now Yum! Brands, Inc.) reported a net loss of $111 million for fiscal 1997 (ended December 27, 1997), following its October 6, 1997 spin-off from PepsiCo. Total revenues were $9.68 billion, down from $10.23 billion in 1996, and operating profit was $241 million after a $530 million fourth-quarter charge to refocus the business. Excluding the fourth-quarter charge, Core Business operating profit was described as increasing, with franchise fees and restaurant margins improving while G&A rose. The company, which operates KFC, Pizza Hut and Taco Bell, described itself as the world's largest quick service restaurant company by system units, with almost 30,000 units in 103 countries. Year-end 1997 Company-owned units were 10,117, with the company stating its strategy is to shift toward franchise ownership. Cash flow from operations was $810 million, and refranchising generated $770 million. The company carried $4.55 billion of long-term debt after a $4.5 billion payment to PepsiCo, and shareholders' equity was a deficit of $1.62 billion. The company stated it does not presently intend to pay dividends. Key near-term considerations include Asian currency weakness, which the filing says is adversely affecting results, expected 1998 increases in net interest expense of $40 to $50 million and in G&A of about $20 million, and Year 2000 costs of $40 to $45 million through 1999.
Mar 26, 1998