[
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
for the fiscal year ended December 27, 2014
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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North Carolina
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13-3951308
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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1441 Gardiner Lane, Louisville, Kentucky
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40213
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (502) 874-8300
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Securities registered pursuant to Section 12(b) of the Act
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, no par value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Item 1.
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Business.
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YUM China (“China” or “China Division”) which includes all operations in mainland China
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YUM India ("India" or "India Division") which includes all operations in India, Bangladesh, Nepal and Sri Lanka
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The KFC Division which includes all operations of the KFC concept outside of China Division and India Division
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The Pizza Hut Division which includes all operations of the Pizza Hut concept outside of China Division and India Division
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The Taco Bell Division which includes all operations of the Taco Bell concept outside of India Division
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KFC was founded in Corbin, Kentucky by Colonel Harland D. Sanders, an early developer of the quick service food business and a pioneer of the restaurant franchise concept. The Colonel perfected his secret blend of 11 herbs and spices for Kentucky Fried Chicken in 1939 and signed up his first franchisee in 1952.
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KFC operates in 120 countries and territories throughout the world. As of year end 2014, KFC had 4,828 units in China, 395 units in India and 14,197 units within the KFC Division. 77 percent of the China units, 51 percent of the India units and 9 percent of the units outside China and India are Company-owned.
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KFC restaurants across the world offer fried and non-fried chicken products such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products marketed under a variety of names. KFC restaurants also offer a variety of entrees and side items suited to local preferences and tastes. Restaurant decor throughout the world is characterized by the image of the Colonel.
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The first Pizza Hut restaurant was opened in 1958 in Wichita, Kansas, and within a year, the first franchise unit was opened. Today, Pizza Hut is the largest restaurant chain in the world specializing in the sale of ready-to-eat pizza products.
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Pizza Hut operates in 92 countries and territories throughout the world. As of year end 2014, Pizza Hut had 1,572 units in China, 431 units in India and 13,602 units within the Pizza Hut Division. Nearly 100 percent of the China units, none of the India units and 6 percent of the units outside China and India are Company-owned.
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Pizza Hut operates in the delivery, carryout and casual dining segments around the world. Outside of the U.S., Pizza Hut often uses unique branding to differentiate these segments. Additionally, a growing percentage of Pizza Hut's customer orders are being generated digitally.
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Pizza Hut features a variety of pizzas which are marketed under varying names. Each of these pizzas is offered with a variety of different toppings suited to local preferences and tastes. Many Pizza Huts also offer pasta and chicken wings, including nearly 5,700 stores offering wings under the brand WingStreet, primarily in the U.S. Outside the U.S., Pizza Hut casual dining restaurants offer a variety of core menu products other than pizza, which are typically suited to local preferences and tastes. Pizza Hut units feature a distinctive red roof logo on their signage.
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The first Taco Bell restaurant was opened in 1962 by Glen Bell in Downey, California, and in 1964, the first Taco Bell franchise was sold.
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Taco Bell operates in 21 countries and territories throughout the world. As of year end 2014, there were 6,199 Taco Bell units within the Taco Bell Division, primarily in the U.S., and 7 units in India. 15 percent of the units within the Taco Bell Division and 100 percent of the India units are Company-owned.
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Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, quesadillas, salads, nachos and other related items. In 2014, Taco Bell rolled out breakfast items in its U.S. stores. Taco Bell units feature a distinctive bell logo on their signage.
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Item 1A.
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Risk Factors.
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The Americans with Disabilities Act in the U.S. and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas.
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The U.S. Fair Labor Standards Act, which governs matters such as minimum wages, overtime and other working conditions, as well as family leave mandates and a variety of similar state laws that govern these and other employment law matters.
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Anti-bribery and corruption laws and regulations, such as the Foreign Corrupt Practices Act, the UK Bribery Act and similar laws, which are the subject of increasing scrutiny and enforcement around the world.
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Laws and regulations in government-mandated health care benefits such as the Patient Protection and Affordable Care Act.
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Laws relating to state and local licensing.
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Laws and regulations relating to health, sanitation, food, workplace safety, child labor, including laws prohibiting the use of certain “hazardous equipment” by employees younger than the age of 18 years of age, and fire safety and prevention.
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Laws and regulations relating to union organizing rights and activities.
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Laws relating to information security, privacy, cashless payments and consumer credit, protection and fraud.
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Environmental regulations.
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Federal and state immigration laws and regulations in the U.S.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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The China Division leased land, building or both in approximately 5,425 units.
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The KFC Division owned approximately 250 units and leased land, building or both in approximately 1,075 units.
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The Pizza Hut Division owned approximately 75 units and leased land, building or both in approximately 725 units.
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The Taco Bell Division owned approximately 550 units and leased land, building or both in approximately 375 units.
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The India Division leased land, building or both in approximately 200 units.
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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2014
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Quarter
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High
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Low
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Dividends
Declared
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First
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$
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77.40
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$
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66.16
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$
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0.37
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Second
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79.99
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73.20
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0.37
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Third
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83.29
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69.40
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—
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Fourth
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78.36
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67.23
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0.82
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2013
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Quarter
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High
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Low
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Dividends
Declared
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First
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$
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70.20
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$
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62.08
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$
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0.335
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Second
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73.52
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64.15
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0.335
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Third
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74.82
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68.10
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—
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Fourth
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78.30
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65.17
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0.74
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Fiscal Periods
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Total number
of shares
purchased
(thousands)
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Average price
paid per share
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Total number of shares
purchased as part of
publicly announced plans
or programs
(thousands)
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Approximate dollar value
of shares that may yet be
purchased under the plans
or programs
(millions)
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Period 10
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—
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$
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—
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—
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$
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443
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9/7/14 - 10/4/14
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Period 11
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1,836
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$
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68.53
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1,836
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$
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317
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10/5/14 - 11/1/14
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Period 12
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871
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$
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73.73
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871
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$
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1,253
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11/2/14 - 11/29/14
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Period 13
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1,689
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$
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71.02
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1,689
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$
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1,133
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11/30/14 - 12/27/14
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Total
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4,396
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$
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70.52
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4,396
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$
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1,133
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12/24/2009
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12/23/2010
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12/30/2011
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12/28/2012
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12/27/2013
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12/26/2014
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YUM!
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$
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100
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$
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143
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$
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174
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$
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194
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$
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226
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$
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228
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S&P 500
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$
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100
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$
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114
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$
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116
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$
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133
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$
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178
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$
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206
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S&P Consumer Discretionary
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$
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100
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$
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127
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$
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134
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$
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163
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$
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235
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$
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260
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Item 6.
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Selected Financial Data.
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Fiscal Year
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2014
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2013
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2012
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2011
(h)
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2010
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Income Statement Data
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Revenues
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Company sales
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$
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11,324
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$
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11,184
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$
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11,833
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$
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10,893
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$
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9,783
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Franchise and license fees and income
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1,955
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1,900
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1,800
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1,733
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1,560
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Total
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13,279
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13,084
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13,633
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12,626
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11,343
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Closures and impairment income (expenses)
(a)
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(535
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)
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(331
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)
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(37
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)
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(135
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)
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(47
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)
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Refranchising gain (loss)
(b)
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33
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100
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78
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(72
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)
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(63
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)
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Operating Profit
(c)
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1,557
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1,798
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2,294
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1,815
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1,769
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Interest expense, net
(c)
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130
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247
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149
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156
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175
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Income before income taxes
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1,427
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1,551
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2,145
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1,659
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1,594
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Net Income – including noncontrolling interest
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1,021
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1,064
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1,608
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1,335
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1,178
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Net Income – YUM! Brands, Inc.
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1,051
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1,091
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1,597
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1,319
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1,158
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|||||
Basic earnings per common share
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2.37
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2.41
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3.46
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2.81
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2.44
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Diluted earnings per common share
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2.32
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2.36
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3.38
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2.74
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2.38
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Diluted earnings per common share before Special Items
(c)
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3.09
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2.97
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3.25
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2.87
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2.53
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Cash Flow Data
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Provided by operating activities
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$
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2,049
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$
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2,139
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$
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2,294
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$
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2,170
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$
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1,968
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Capital spending, excluding acquisitions and investments
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1,033
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|
1,049
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1,099
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|
940
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|
796
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Proceeds from refranchising of restaurants
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114
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|
260
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364
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246
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265
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Repurchase shares of Common Stock
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820
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|
770
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965
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752
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371
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Dividends paid on Common Stock
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669
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615
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544
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|
481
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412
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Balance Sheet Data
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Total assets
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$
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8,345
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$
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8,695
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$
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9,013
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$
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8,834
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$
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8,316
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Long-term debt
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3,077
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|
2,918
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|
|
2,932
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2,997
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2,915
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|||||
Total debt
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3,344
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|
2,989
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|
|
2,942
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|
3,317
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3,588
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|||||
Other Data
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Number of stores at year end
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||||||||||
Company
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8,664
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|
8,097
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7,544
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7,403
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|
7,238
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Unconsolidated Affiliates
|
757
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|
716
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660
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|
|
587
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|
525
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Franchisees & licensees
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32,125
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31,420
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30,733
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29,056
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29,998
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System
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41,546
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40,233
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38,937
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37,046
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37,761
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|||||
China system sales growth
(d)
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||||||||||
Reported
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1
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%
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(1
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)%
|
|
23
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%
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|
35
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%
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|
18
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%
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|||||
Local currency
(e)
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1
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%
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(4
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)%
|
|
20
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%
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|
29
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%
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|
17
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%
|
|||||
KFC Division system sales growth
(d)(f)
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|
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|
|
|
|
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||||||||||
Reported
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
9
|
%
|
|
N/A
|
|
|||||
Local currency
(e)
|
6
|
%
|
|
3
|
%
|
|
6
|
%
|
|
4
|
%
|
|
N/A
|
|
|||||
Pizza Hut Division system sales growth
(d)(f)
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported
|
—
|
%
|
|
—
|
%
|
|
2
|
%
|
|
5
|
%
|
|
N/A
|
|
|||||
Local currency
(e)
|
1
|
%
|
|
1
|
%
|
|
5
|
%
|
|
2
|
%
|
|
N/A
|
|
|||||
Taco Bell Division system sales growth
(d)(f)
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported
|
4
|
%
|
|
4
|
%
|
|
7
|
%
|
|
1
|
%
|
|
N/A
|
|
|||||
Local currency
(e)
|
4
|
%
|
|
4
|
%
|
|
9
|
%
|
|
(1
|
)%
|
|
N/A
|
|
|||||
India system sales growth
(d)(g)
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported
|
(1
|
)%
|
|
11
|
%
|
|
13
|
%
|
|
36
|
%
|
|
43
|
%
|
|||||
Local currency
(e)
|
3
|
%
|
|
20
|
%
|
|
29
|
%
|
|
35
|
%
|
|
36
|
%
|
|||||
Shares outstanding at year end
|
434
|
|
|
443
|
|
|
451
|
|
|
460
|
|
|
469
|
|
|||||
Cash dividends declared per Common Share
|
$
|
1.56
|
|
|
$
|
1.41
|
|
|
$
|
1.24
|
|
|
$
|
1.07
|
|
|
$
|
0.92
|
|
Market price per share at year end
|
$
|
73.14
|
|
|
$
|
73.87
|
|
|
$
|
64.72
|
|
|
$
|
59.01
|
|
|
$
|
49.66
|
|
(a)
|
Closures and impairment income (expense) includes $463 million and $295 million of Little Sheep impairment losses in 2014 and 2013 respectively, (See Note 4). Additionally, 2011 included $80 million of net losses related to the divestitures of the Long John Silver's and A&W All American Food Restaurants brands.
|
(b)
|
See Note 4 for discussion of Refranchising gain (loss) for fiscal years 2014, 2013 and 2012. Fiscal year 2011 included a charge of $76 million as a result of our decision to refranchise or close all of our remaining Company-owned Pizza Hut UK dine-in restaurants. Fiscal year 2010 included a $52 million loss on the refranchising of our Mexico equity market.
|
(c)
|
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 on a basis before Special Items.
|
(d)
|
System sales growth includes the results of all restaurants regardless of ownership, including company-owned, franchise, unconsolidated affiliate and license restaurants that operate our Concepts, except for non-company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise, unconsolidated affiliate and license restaurants typically generate ongoing franchise and license fees for the Company (typically at a rate of 4% to 6% of sales). Franchise, unconsolidated affiliate and license restaurant sales are not included in Company sales on the Consolidated Statements of Income; however, the franchise and license fees are included in the Company’s revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.
|
(e)
|
Local currency represents the percentage change excluding the impact of foreign currency translation. These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
|
(f)
|
In the first quarter of 2014, we changed our management reporting structure to align our global operations outside of China and India. We have restated our comparable segment information back to 2010. Since 2009 was not restated, system sales growth in 2010 is not readily available.
|
(g)
|
Effective the beginning of 2014, results from our 28 Mauritius stores are included in KFC and Pizza Hut Divisions as applicable. While there was no impact to our consolidated results, this change negatively impacted India's 2014 reported and local currency system sales growth by 10% and 11%, respectively.
|
(h)
|
Fiscal years 2014, 2013, 2012 and 2010 include 52 weeks and fiscal year 2011 includes 53 weeks. Our fiscal calendar results in a 53rd week every five or six years. This impacts all of our U.S. businesses and certain of our international businesses that report on a period, as opposed to a monthly, basis within our global brand divisions. Our China and India Divisions report on a monthly basis and thus did not have a 53rd week in 2011.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Building Powerful Brands Through Superior Marketing, Breakthrough Innovation and Compelling Value with a Foundation Built on Winning Food and World Class Operations
|
•
|
Driving Aggressive Unit Expansion Everywhere, Especially in Emerging Markets, and Building Leading Brands in Every Significant Category in China and India
|
•
|
Creating Industry Leading Returns Through Franchising and Disciplined Use of Capital, Maximizing Long-term Shareholder Value
|
•
|
YUM China (“China” or “China Division”) which includes all operations in mainland China
|
•
|
YUM India ("India" or "India Division") which includes all operations in India, Bangladesh, Nepal and Sri Lanka
|
•
|
The KFC Division which includes all operations of the KFC concept outside of China Division and India Division
|
•
|
The Pizza Hut Division which includes all operations of the Pizza Hut concept outside of China Division and India Division
|
•
|
The Taco Bell Division which includes all operations of the Taco Bell concept outside of India Division
|
•
|
The Company provides certain percentage changes excluding the impact of foreign currency translation (“FX” or “Forex”). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
|
•
|
System sales growth includes the results of all restaurants regardless of ownership, including company-owned, franchise, unconsolidated affiliate and license restaurants that operate our Concepts, except for non-company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise, unconsolidated affiliate and license restaurants typically generate ongoing franchise and license fees for the Company (typically at a rate of 4% to 6% of sales). Franchise, unconsolidated affiliate and license restaurant sales are not included in Company sales on the Consolidated Statements of Income; however, the franchise and license fees are included in the Company’s revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.
|
•
|
Same-store sales growth is the estimated percentage change in sales of all restaurants that have been open and in the YUM system one year or more. The impact of same-store sales growth on both our Company-owned store results and Franchise and license fees and income is described elsewhere in this MD&A.
|
•
|
Company Restaurant profit ("Restaurant profit") is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales. Company restaurant margin as a percentage of sales is defined as Restaurant profit divided by Company sales. Within the Company Sales and Restaurant Profit analysis, Store Portfolio Actions represent the net impact of new unit openings, acquisitions, refranchising and store closures, and Other primarily represents the impact of same-store sales as well as the impact of changes in costs such as inflation/deflation.
|
•
|
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") throughout this MD&A, the Company provides non-GAAP measurements which present operating results on a basis before items that we have deemed Special. 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 those items that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.
|
•
|
KFC Division system sales and Operating Profit increased by 6% and 13%, respectively. Same store sales grew 3% and the Division opened 666 new international units.
|
•
|
Pizza Hut Division grew system sales by 1% and Operating Profit declined 13%. Same-store sales declined 1% and the Division opened 465 new international units.
|
•
|
Taco Bell Division system sales and Operating Profit increased by 4% and 5%, respectively. Same-store sales increased 3% and the Division opened 236 new units.
|
•
|
Foreign currency translation negatively impacted Operating Profit by $27 million.
|
•
|
Our effective tax rate decreased from 28.0% in 2013 to 25.5% in 2014.
|
|
Amount
|
|
% B/(W)
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||||||||
Company sales
|
$
|
11,324
|
|
|
$
|
11,184
|
|
|
$
|
11,833
|
|
|
1
|
|
|
|
|
(5
|
)
|
|
|
Franchise and license fees and income
|
1,955
|
|
|
1,900
|
|
|
1,800
|
|
|
3
|
|
|
|
|
6
|
|
|
|
|||
Total revenues
|
$
|
13,279
|
|
|
$
|
13,084
|
|
|
$
|
13,633
|
|
|
1
|
|
|
|
|
(4
|
)
|
|
|
Restaurant profit
|
$
|
1,642
|
|
|
$
|
1,683
|
|
|
$
|
1,981
|
|
|
(2
|
)
|
|
|
|
(15
|
)
|
|
|
Restaurant Margin %
|
14.5
|
%
|
|
15.0
|
%
|
|
16.7
|
%
|
|
(0.5
|
)
|
|
ppts.
|
|
(1.7
|
)
|
|
ppts.
|
|||
Operating Profit
|
$
|
1,557
|
|
|
$
|
1,798
|
|
|
$
|
2,294
|
|
|
(13
|
)
|
|
|
|
(22
|
)
|
|
|
Interest expense, net
|
130
|
|
|
247
|
|
|
149
|
|
|
47
|
|
|
|
|
(66
|
)
|
|
|
|||
Income tax provision
|
406
|
|
|
487
|
|
|
537
|
|
|
17
|
|
|
|
|
9
|
|
|
|
|||
Net Income – including noncontrolling interests
|
1,021
|
|
|
1,064
|
|
|
1,608
|
|
|
(4
|
)
|
|
|
|
(34
|
)
|
|
|
|||
Net Income (loss) – noncontrolling interests
|
(30
|
)
|
|
(27
|
)
|
|
11
|
|
|
(12
|
)
|
|
|
|
NM
|
|
|
|
|||
Net Income – YUM! Brands, Inc.
|
$
|
1,051
|
|
|
$
|
1,091
|
|
|
$
|
1,597
|
|
|
(4
|
)
|
|
|
|
(32
|
)
|
|
|
Diluted EPS
(a)
|
$
|
2.32
|
|
|
$
|
2.36
|
|
|
$
|
3.38
|
|
|
(2
|
)
|
|
|
|
(30
|
)
|
|
|
Diluted EPS before Special Items
(a)
|
$
|
3.09
|
|
|
$
|
2.97
|
|
|
$
|
3.25
|
|
|
4
|
|
|
|
|
(9
|
)
|
|
|
Reported Effective tax rate
|
28.5%
|
|
31.4%
|
|
25.0%
|
|
|
|
|
|
|
|
|
||||||||
Effective tax rate before Special Items
|
25.5%
|
|
28.0%
|
|
25.8%
|
|
|
|
|
|
|
|
|
(a)
|
See Note 3 for the number of shares used in these calculations.
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|||||
System Sales Growth, reported
|
2
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|||
System Sales Growth, excluding FX
|
3
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
% Increase (Decrease)
|
|||||||
Unit Count
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|||||
Franchise & License
|
32,125
|
|
|
31,420
|
|
|
30,733
|
|
|
2
|
|
|
2
|
|
Company-owned
|
8,664
|
|
|
8,097
|
|
|
7,544
|
|
|
7
|
|
|
7
|
|
Unconsolidated Affiliates
|
757
|
|
|
716
|
|
|
660
|
|
|
6
|
|
|
8
|
|
|
41,546
|
|
|
40,233
|
|
|
38,937
|
|
|
3
|
|
|
3
|
|
|
|
Year
|
||||||||||
Detail of Special Items
|
|
2014
|
|
2013
|
|
2012
|
||||||
Little Sheep impairment (See Note 4)
|
|
$
|
(463
|
)
|
|
$
|
(295
|
)
|
|
$
|
—
|
|
Gain upon acquisition of Little Sheep (See Note 4)
|
|
—
|
|
|
—
|
|
|
74
|
|
|||
U.S. Refranchising gain (loss) (See Note 17)
|
|
6
|
|
|
91
|
|
|
$
|
122
|
|
||
Pension settlement charges (See Note 4)
|
|
—
|
|
|
(10
|
)
|
|
(84
|
)
|
|||
Losses associated with the refranchising of the Pizza Hut UK dine-in business (See Note 4)
|
|
—
|
|
|
(1
|
)
|
|
(70
|
)
|
|||
Other Special Items Income (Expense)
(a)
|
|
10
|
|
|
(7
|
)
|
|
16
|
|
|||
Special Items Income (Expense) - Operating Profit
|
|
(447
|
)
|
|
(222
|
)
|
|
58
|
|
|||
Losses related to the extinguishment of debt - Interest Expense, net (See Note 4)
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|||
Special Items Income (Expense) before income taxes
|
|
(447
|
)
|
|
(340
|
)
|
|
58
|
|
|||
Tax Benefit (Expense) on Special Items
(b)
|
|
72
|
|
|
41
|
|
|
1
|
|
|||
Special Items Income (Expense), net of tax - including noncontrolling interests
|
|
(375
|
)
|
|
(299
|
)
|
|
59
|
|
|||
Special Items Income (Expense), net of tax - noncontrolling interests
|
|
26
|
|
|
19
|
|
|
—
|
|
|||
Special Items Income (Expense), net of tax - YUM! Brands, Inc.
|
|
$
|
(349
|
)
|
|
$
|
(280
|
)
|
|
$
|
59
|
|
Average diluted shares outstanding
|
|
453
|
|
|
461
|
|
|
473
|
|
|||
Special Items diluted EPS
|
|
$
|
(0.77
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Operating Profit Before Special Items to Reported Operating Profit
|
|
|
|
|
|
|
||||||
Operating Profit before Special Items
|
|
$
|
2,004
|
|
|
$
|
2,020
|
|
|
$
|
2,236
|
|
Special Items Income (Expense) - Operating Profit
|
|
(447
|
)
|
|
(222
|
)
|
|
58
|
|
|||
Reported Operating Profit
|
|
$
|
1,557
|
|
|
$
|
1,798
|
|
|
$
|
2,294
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of EPS Before Special Items to Reported EPS
|
|
|
|
|
|
|
||||||
Diluted EPS before Special Items
|
|
$
|
3.09
|
|
|
$
|
2.97
|
|
|
$
|
3.25
|
|
Special Items EPS
|
|
(0.77
|
)
|
|
(0.61
|
)
|
|
0.13
|
|
|||
Reported EPS
|
|
$
|
2.32
|
|
|
$
|
2.36
|
|
|
$
|
3.38
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Effective Tax Rate Before Special Items to Reported Effective Tax Rate
|
|
|
|
|
|
|
||||||
Effective Tax Rate before Special Items
|
|
25.5
|
%
|
|
28.0
|
%
|
|
25.8
|
%
|
|||
Impact on Tax Rate as a result of Special Items
(b)
|
|
3.0
|
%
|
|
3.4
|
%
|
|
(0.8
|
)%
|
|||
Reported Effective Tax Rate
|
|
28.5
|
%
|
|
31.4
|
%
|
|
25.0
|
%
|
(a)
|
Other Special Items Income (Expense) in 2014 primarily includes gains of $7 million from real estate sales related to our previously refranchised Mexico business. In connection with the refranchising of stores in the U.S., we have taken several measures to transform our U.S. business, including G&A productivity initiatives and realignment of resources (primarily severance and early retirement costs). Other Special Items Income (Expense) in 2013 primarily includes charges relating to these U.S. G&A productivity initiatives and realignment of resources of $5 million as well as $2 million of costs recorded in G&A that were part of the $120 million charge related to the extinguishment of debt. Other Special Items Income (Expense) in 2012 primarily includes the depreciation reduction from the Pizza Hut UK and KFC U.S. restaurants impaired upon our decision or offer to refranchise that remained Company stores for some or all of the period presented of $13 million and $3 million, respectively, gains from real estate sales related to our previously refranchised Mexico business of $3 million and charges relating to U.S. G&A productivity initiatives and realignment of resources of $5 million.
|
(b)
|
The tax benefit (expense) was determined based upon the impact of the nature, as well as the jurisdiction of the respective individual components within Special Items.
|
|
|
|
|
|
|
|
|
% B/(W)
|
|
% B/(W)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
Reported
|
|
Ex FX
|
|
Reported
|
|
Ex FX
|
||||||||||||||
Company sales
|
|
$
|
6,821
|
|
|
$
|
6,800
|
|
|
$
|
6,797
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
Franchise and license fees and income
|
|
113
|
|
|
105
|
|
|
101
|
|
|
7
|
|
|
|
7
|
|
|
|
4
|
|
|
|
2
|
|
|
|||
Total revenues
|
|
$
|
6,934
|
|
|
$
|
6,905
|
|
|
$
|
6,898
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant profit
|
|
$
|
1,009
|
|
|
$
|
1,050
|
|
|
$
|
1,233
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(15
|
)
|
|
|
(17
|
)
|
|
Restaurant margin %
|
|
14.8
|
%
|
|
15.4
|
%
|
|
18.1
|
%
|
|
(0.6
|
)
|
ppts.
|
|
(0.6
|
)
|
ppts.
|
|
(2.7
|
)
|
ppts.
|
|
(2.7
|
)
|
ppts.
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
G&A expenses
|
|
$
|
391
|
|
|
$
|
357
|
|
|
$
|
334
|
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
Operating Profit
|
|
$
|
713
|
|
|
$
|
777
|
|
|
$
|
1,015
|
|
|
(8
|
)
|
|
|
(8
|
)
|
|
|
(23
|
)
|
|
|
(26
|
)
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||
System Sales Growth, reported
|
|
|
|
|
|
1
|
%
|
|
(1
|
)%
|
System Sales Growth, excluding FX
|
|
|
|
|
|
1
|
%
|
|
(4
|
)%
|
Same-Store Sales Growth (Decline) %
|
|
|
|
|
|
(5
|
)%
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
% Increase (Decrease)
|
||||||||
Unit Count
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||
Company-owned
|
|
5,417
|
|
|
5,026
|
|
|
4,547
|
|
|
8
|
|
|
11
|
|
|
Unconsolidated Affiliates
|
|
757
|
|
|
716
|
|
|
660
|
|
|
6
|
|
|
8
|
|
|
Franchise & License
|
|
541
|
|
|
501
|
|
|
519
|
|
|
8
|
|
|
(3
|
)
|
|
|
|
6,715
|
|
|
6,243
|
|
|
5,726
|
|
|
8
|
|
|
9
|
|
|
|
2013
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
2014
|
||||||
Company-owned
|
|
5,026
|
|
|
664
|
|
|
(195
|
)
|
|
(79
|
)
|
|
1
|
|
|
5,417
|
|
Unconsolidated Affiliates
|
|
716
|
|
|
56
|
|
|
(14
|
)
|
|
(1
|
)
|
|
—
|
|
|
757
|
|
Franchise & License
|
|
501
|
|
|
17
|
|
|
(56
|
)
|
|
80
|
|
|
(1
|
)
|
|
541
|
|
Total
|
|
6,243
|
|
|
737
|
|
|
(265
|
)
|
|
—
|
|
|
—
|
|
|
6,715
|
|
|
|
2012
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
2013
|
||||||
Company-owned
|
|
4,547
|
|
|
664
|
|
|
(158
|
)
|
|
(28
|
)
|
|
1
|
|
|
5,026
|
|
Unconsolidated Affiliates
|
|
660
|
|
|
66
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
716
|
|
Franchise & License
|
|
519
|
|
|
10
|
|
|
(55
|
)
|
|
28
|
|
|
(1
|
)
|
|
501
|
|
Total
|
|
5,726
|
|
|
740
|
|
|
(223
|
)
|
|
—
|
|
|
—
|
|
|
6,243
|
|
|
2014 vs. 2013
|
||||||||||||||||||
Income / (Expense)
|
2013
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2014
|
||||||||||
Company sales
|
$
|
6,800
|
|
|
$
|
358
|
|
|
$
|
(322
|
)
|
|
$
|
(15
|
)
|
|
$
|
6,821
|
|
Cost of sales
|
(2,258
|
)
|
|
(104
|
)
|
|
151
|
|
|
4
|
|
|
(2,207
|
)
|
|||||
Cost of labor
|
(1,360
|
)
|
|
(75
|
)
|
|
26
|
|
|
2
|
|
|
(1,407
|
)
|
|||||
Occupancy and other
|
(2,132
|
)
|
|
(124
|
)
|
|
52
|
|
|
6
|
|
|
(2,198
|
)
|
|||||
Restaurant profit
|
$
|
1,050
|
|
|
$
|
55
|
|
|
$
|
(93
|
)
|
|
$
|
(3
|
)
|
|
$
|
1,009
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
14.8
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2013 vs. 2012
|
||||||||||||||||||
Income / (Expense)
|
2012
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2013
|
||||||||||
Company sales
|
$
|
6,797
|
|
|
$
|
611
|
|
|
$
|
(785
|
)
|
|
$
|
177
|
|
|
$
|
6,800
|
|
Cost of sales
|
(2,312
|
)
|
|
(190
|
)
|
|
303
|
|
|
(59
|
)
|
|
(2,258
|
)
|
|||||
Cost of labor
|
(1,259
|
)
|
|
(129
|
)
|
|
62
|
|
|
(34
|
)
|
|
(1,360
|
)
|
|||||
Occupancy and other
|
(1,993
|
)
|
|
(211
|
)
|
|
127
|
|
|
(55
|
)
|
|
(2,132
|
)
|
|||||
Restaurant profit
|
$
|
1,233
|
|
|
$
|
81
|
|
|
$
|
(293
|
)
|
|
$
|
29
|
|
|
$
|
1,050
|
|
|
18.1
|
%
|
|
|
|
|
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
% B/(W)
|
|
% B/(W)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
Reported
|
|
Ex FX
|
|
Reported
|
|
Ex FX
|
||||||||||||||
Company sales
|
|
$
|
2,320
|
|
|
$
|
2,192
|
|
|
$
|
2,212
|
|
|
6
|
|
|
|
9
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
Franchise and license fees and income
|
|
873
|
|
|
844
|
|
|
802
|
|
|
4
|
|
|
|
7
|
|
|
|
5
|
|
|
|
8
|
|
|
|||
Total revenues
|
|
$
|
3,193
|
|
|
$
|
3,036
|
|
|
$
|
3,014
|
|
|
5
|
|
|
|
8
|
|
|
|
1
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant profit
|
|
$
|
308
|
|
|
$
|
277
|
|
|
$
|
298
|
|
|
12
|
|
|
|
14
|
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
Restaurant margin %
|
|
13.3
|
%
|
|
12.6
|
%
|
|
13.5
|
%
|
|
0.7
|
|
ppts.
|
|
0.7
|
|
ppts.
|
|
(0.9
|
)
|
ppts.
|
|
(0.9
|
)
|
ppts.
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
G&A expenses
|
|
$
|
383
|
|
|
$
|
391
|
|
|
$
|
400
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
|
1
|
|
|
Operating Profit
|
|
$
|
708
|
|
|
$
|
649
|
|
|
$
|
626
|
|
|
9
|
|
|
|
13
|
|
|
|
4
|
|
|
|
7
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||
System Sales Growth, reported
|
|
|
|
|
|
2
|
%
|
|
—
|
%
|
System Sales Growth, excluding FX
|
|
|
|
|
|
6
|
%
|
|
3
|
%
|
Same-Store Sales Growth %
|
|
|
|
|
|
3
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
% Increase (Decrease)
|
||||||||
Unit Count
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||
Franchise & License
|
|
12,874
|
|
|
12,647
|
|
|
12,446
|
|
|
2
|
|
|
2
|
|
|
Company-owned
|
|
1,323
|
|
|
1,257
|
|
|
1,166
|
|
|
5
|
|
|
8
|
|
|
|
|
14,197
|
|
|
13,904
|
|
|
13,612
|
|
|
2
|
|
|
2
|
|
|
|
2013
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
Other
|
|
2014
|
|||||||
Franchise & License
|
|
12,647
|
|
|
553
|
|
|
(356
|
)
|
|
39
|
|
|
(4
|
)
|
|
(5
|
)
|
|
12,874
|
|
Company-owned
|
|
1,257
|
|
|
123
|
|
|
(22
|
)
|
|
(39
|
)
|
|
4
|
|
|
—
|
|
|
1,323
|
|
Total
|
|
13,904
|
|
|
676
|
|
|
(378
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
14,197
|
|
|
|
2012
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
Other
|
|
2013
|
|||||||
Franchise & License
|
|
12,446
|
|
|
558
|
|
|
(353
|
)
|
|
58
|
|
|
(71
|
)
|
|
9
|
|
|
12,647
|
|
Company-owned
|
|
1,166
|
|
|
101
|
|
|
(23
|
)
|
|
(58
|
)
|
|
71
|
|
|
—
|
|
|
1,257
|
|
Total
|
|
13,612
|
|
|
659
|
|
|
(376
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|
13,904
|
|
|
2014 vs. 2013
|
||||||||||||||||||
Income / (Expense)
|
2013
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2014
|
||||||||||
Company sales
|
$
|
2,192
|
|
|
$
|
110
|
|
|
$
|
79
|
|
|
$
|
(61
|
)
|
|
$
|
2,320
|
|
Cost of sales
|
(766
|
)
|
|
(43
|
)
|
|
(26
|
)
|
|
26
|
|
|
(809
|
)
|
|||||
Cost of labor
|
(521
|
)
|
|
(25
|
)
|
|
(16
|
)
|
|
10
|
|
|
(552
|
)
|
|||||
Occupancy and other
|
(628
|
)
|
|
(38
|
)
|
|
(3
|
)
|
|
18
|
|
|
(651
|
)
|
|||||
Restaurant profit
|
$
|
277
|
|
|
$
|
4
|
|
|
$
|
34
|
|
|
$
|
(7
|
)
|
|
$
|
308
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
13.3
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2013 vs. 2012
|
||||||||||||||||||
Income / (Expense)
|
2012
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2013
|
||||||||||
Company sales
|
$
|
2,212
|
|
|
$
|
(19
|
)
|
|
$
|
35
|
|
|
$
|
(36
|
)
|
|
$
|
2,192
|
|
Cost of sales
|
(766
|
)
|
|
—
|
|
|
(15
|
)
|
|
15
|
|
|
(766
|
)
|
|||||
Cost of labor
|
(541
|
)
|
|
14
|
|
|
(1
|
)
|
|
7
|
|
|
(521
|
)
|
|||||
Occupancy and other
|
(607
|
)
|
|
(9
|
)
|
|
(21
|
)
|
|
9
|
|
|
(628
|
)
|
|||||
Restaurant profit
|
$
|
298
|
|
|
$
|
(14
|
)
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
|
$
|
277
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
|
% B/(W)
|
|
% B/(W)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
Reported
|
|
Ex FX
|
|
Reported
|
|
Ex FX
|
||||||||||||||
Company sales
|
|
$
|
607
|
|
|
$
|
609
|
|
|
$
|
993
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(39
|
)
|
|
|
(39
|
)
|
|
Franchise and license fees and income
|
|
541
|
|
|
538
|
|
|
517
|
|
|
1
|
|
|
|
2
|
|
|
|
4
|
|
|
|
5
|
|
|
|||
Total revenues
|
|
$
|
1,148
|
|
|
$
|
1,147
|
|
|
$
|
1,510
|
|
|
—
|
|
|
|
1
|
|
|
|
(24
|
)
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant profit
|
|
$
|
50
|
|
|
$
|
71
|
|
|
$
|
110
|
|
|
(30
|
)
|
|
|
(32
|
)
|
|
|
(36
|
)
|
|
|
(36
|
)
|
|
Restaurant margin %
|
|
8.2
|
%
|
|
11.7
|
%
|
|
11.2
|
%
|
|
(3.5
|
)
|
ppts.
|
|
(3.7
|
)
|
ppts.
|
|
0.5
|
|
ppts.
|
|
0.4
|
|
ppts.
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
G&A expenses
|
|
$
|
246
|
|
|
$
|
224
|
|
|
$
|
258
|
|
|
(10
|
)
|
|
|
(11
|
)
|
|
|
13
|
|
|
|
13
|
|
|
Operating Profit
|
|
$
|
295
|
|
|
$
|
339
|
|
|
$
|
320
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
6
|
|
|
|
7
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||
System Sales Growth, reported
|
|
|
|
|
|
—
|
%
|
|
—
|
%
|
System Sales Growth, excluding FX
|
|
|
|
|
|
1
|
%
|
|
1
|
%
|
Same-Store Sales Growth (Decline) %
|
|
|
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
% Increase (Decrease)
|
||||||||
Unit Count
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||
Franchise & License
|
|
12,814
|
|
|
12,601
|
|
|
12,393
|
|
|
2
|
|
|
2
|
|
|
Company-owned
|
|
788
|
|
|
732
|
|
|
667
|
|
|
8
|
|
|
10
|
|
|
|
|
13,602
|
|
|
13,333
|
|
|
13,060
|
|
|
2
|
|
|
2
|
|
|
|
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
|
|
|
|
2012
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
Other
|
|
2013
|
|||||||
Franchise & License
|
|
12,393
|
|
|
612
|
|
|
(363
|
)
|
|
22
|
|
|
(60
|
)
|
|
(3
|
)
|
|
12,601
|
|
Company-owned
|
|
667
|
|
|
80
|
|
|
(53
|
)
|
|
(22
|
)
|
|
60
|
|
|
—
|
|
|
732
|
|
Total
|
|
13,060
|
|
|
692
|
|
|
(416
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
13,333
|
|
|
2014 vs. 2013
|
||||||||||||||||||
Income / (Expense)
|
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
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
8.2
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2013 vs. 2012
|
||||||||||||||||||
Income / (Expense)
|
2012
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2013
|
||||||||||
Company sales
|
$
|
993
|
|
|
$
|
(381
|
)
|
|
$
|
(6
|
)
|
|
$
|
3
|
|
|
$
|
609
|
|
Cost of sales
|
(259
|
)
|
|
88
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(173
|
)
|
|||||
Cost of labor
|
(305
|
)
|
|
119
|
|
|
4
|
|
|
(1
|
)
|
|
(183
|
)
|
|||||
Occupancy and other
|
(319
|
)
|
|
145
|
|
|
(8
|
)
|
|
—
|
|
|
(182
|
)
|
|||||
Restaurant profit
|
$
|
110
|
|
|
$
|
(29
|
)
|
|
$
|
(11
|
)
|
|
$
|
1
|
|
|
$
|
71
|
|
|
11.2
|
%
|
|
|
|
|
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
% B/(W)
|
|
% B/(W)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
Reported
|
|
Ex FX
|
|
Reported
|
|
Ex FX
|
||||||||||||||
Company sales
|
|
$
|
1,452
|
|
|
$
|
1,474
|
|
|
$
|
1,747
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(16
|
)
|
|
|
(16
|
)
|
|
Franchise and license fees and income
|
|
411
|
|
|
395
|
|
|
362
|
|
|
4
|
|
|
|
4
|
|
|
|
9
|
|
|
|
9
|
|
|
|||
Total revenues
|
|
$
|
1,863
|
|
|
$
|
1,869
|
|
|
$
|
2,109
|
|
|
—
|
|
|
|
—
|
|
|
|
(11
|
)
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant profit
|
|
$
|
274
|
|
|
$
|
287
|
|
|
$
|
319
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
Restaurant margin %
|
|
18.9
|
%
|
|
19.5
|
%
|
|
18.2
|
%
|
|
(0.6
|
)
|
ppts.
|
|
(0.6
|
)
|
ppts.
|
|
1.3
|
|
ppts.
|
|
1.3
|
|
ppts.
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
G&A expenses
|
|
$
|
185
|
|
|
$
|
206
|
|
|
$
|
223
|
|
|
10
|
|
|
|
10
|
|
|
|
7
|
|
|
|
7
|
|
|
Operating Profit
|
|
$
|
480
|
|
|
$
|
456
|
|
|
$
|
435
|
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||
System Sales Growth, reported
|
|
|
|
|
|
4
|
%
|
|
4
|
%
|
System Sales Growth, excluding FX
|
|
|
|
|
|
4
|
%
|
|
4
|
%
|
Same-Store Sales Growth %
|
|
|
|
|
|
3
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
% Increase (Decrease)
|
||||||||
Unit Count
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||
Franchise & License
|
|
5,273
|
|
|
5,157
|
|
|
4,933
|
|
|
2
|
|
|
5
|
|
|
Company-owned
|
|
926
|
|
|
891
|
|
|
1,044
|
|
|
4
|
|
|
(15
|
)
|
|
|
|
6,199
|
|
|
6,048
|
|
|
5,977
|
|
|
2
|
|
|
1
|
|
|
|
2013
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
Other
|
|
2014
|
|||||||
Franchise & License
|
|
5,157
|
|
|
209
|
|
|
(90
|
)
|
|
3
|
|
|
(12
|
)
|
|
6
|
|
|
5,273
|
|
Company-owned
|
|
891
|
|
|
27
|
|
|
(1
|
)
|
|
(3
|
)
|
|
12
|
|
|
—
|
|
|
926
|
|
Total
|
|
6,048
|
|
|
236
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6,199
|
|
|
|
2012
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
Other
|
|
2013
|
|||||||
Franchise & License
|
|
4,933
|
|
|
152
|
|
|
(98
|
)
|
|
178
|
|
|
—
|
|
|
(8
|
)
|
|
5,157
|
|
Company-owned
|
|
1,044
|
|
|
27
|
|
|
(2
|
)
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
891
|
|
Total
|
|
5,977
|
|
|
179
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
6,048
|
|
|
2014 vs. 2013
|
||||||||||||||||||
Income / (Expense)
|
2013
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2014
|
||||||||||
Company sales
|
$
|
1,474
|
|
|
$
|
(47
|
)
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
1,452
|
|
Cost of sales
|
(424
|
)
|
|
14
|
|
|
(21
|
)
|
|
—
|
|
|
(431
|
)
|
|||||
Cost of labor
|
(419
|
)
|
|
14
|
|
|
(9
|
)
|
|
—
|
|
|
(414
|
)
|
|||||
Occupancy and other
|
(344
|
)
|
|
12
|
|
|
(1
|
)
|
|
—
|
|
|
(333
|
)
|
|||||
Restaurant profit
|
$
|
287
|
|
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
274
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
18.9
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
2013 vs. 2012
|
||||||||||||||||||
Income / (Expense)
|
2012
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2013
|
||||||||||
Company sales
|
$
|
1,747
|
|
|
$
|
(283
|
)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
1,474
|
|
Cost of sales
|
(502
|
)
|
|
83
|
|
|
(5
|
)
|
|
—
|
|
|
(424
|
)
|
|||||
Cost of labor
|
(504
|
)
|
|
88
|
|
|
(3
|
)
|
|
—
|
|
|
(419
|
)
|
|||||
Occupancy and other
|
(422
|
)
|
|
78
|
|
|
—
|
|
|
—
|
|
|
(344
|
)
|
|||||
Restaurant profit
|
$
|
319
|
|
|
$
|
(34
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
287
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
% B/(W)
|
|
% B/(W)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
Reported
|
|
Ex FX
|
|
Reported
|
|
Ex FX
|
||||||||||||||
Total revenues
(a)
|
|
$
|
141
|
|
|
$
|
127
|
|
|
$
|
102
|
|
|
11
|
|
|
|
16
|
|
|
|
24
|
|
|
|
36
|
|
|
Operating Profit (loss)
|
|
$
|
(9
|
)
|
|
$
|
(15
|
)
|
|
$
|
(1
|
)
|
|
39
|
|
|
|
35
|
|
|
|
NM
|
|
|
|
NM
|
|
|
|
|
|
|
|
2014
|
|
2013
|
||
System Sales Growth, reported
(a)(b)
|
|
|
|
|
|
(1
|
)%
|
|
11
|
%
|
System Sales Growth, excluding FX
(a)(b)
|
|
|
|
|
|
3
|
%
|
|
20
|
%
|
Same-Store Sales Growth (Decline) %
(b)
|
|
|
|
|
|
(5
|
)%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
% Increase (Decrease)
|
||||||||
Unit Count
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||
Franchise & License
|
|
623
|
|
|
514
|
|
|
442
|
|
|
21
|
|
|
16
|
|
|
Company-owned
|
|
210
|
|
|
191
|
|
|
120
|
|
|
10
|
|
|
59
|
|
|
|
|
833
|
|
|
705
|
|
|
562
|
|
|
18
|
|
|
25
|
|
|
|
2013
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
2014
|
||||||
Franchise & License
|
|
514
|
|
|
110
|
|
|
(21
|
)
|
|
20
|
|
|
—
|
|
|
623
|
|
Company-owned
|
|
191
|
|
|
46
|
|
|
(7
|
)
|
|
(20
|
)
|
|
—
|
|
|
210
|
|
Total
|
|
705
|
|
|
156
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
833
|
|
|
|
2012
|
|
New Builds
|
|
Closures
|
|
Refranchised
|
|
Acquired
|
|
2013
|
||||||
Franchise & License
|
|
442
|
|
|
89
|
|
|
(11
|
)
|
|
—
|
|
|
(6
|
)
|
|
514
|
|
Company-owned
|
|
120
|
|
|
68
|
|
|
(3
|
)
|
|
—
|
|
|
6
|
|
|
191
|
|
Total
|
|
562
|
|
|
157
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
705
|
|
(a)
|
Effective the beginning of 2014, results from our 28 Mauritius stores are included in KFC and Pizza Hut Divisions as applicable. Prior year units have been adjusted for comparability while division System Sales Growth, Total Revenues and Operating Profit (loss) have not been restated due to the immaterial dollar impact of this change. While there was no impact to our consolidated results, this change negatively impacted India's 2014 System Sales Growth, reported and excluding FX, by 10% and 11%, respectively. This change negatively impacted India's 2014 Total revenues by 2% and Operating Profit (loss) by $1 million.
|
(b)
|
At the beginning of fiscal 2013, we eliminated the period lag that was previously used to facilitate the reporting of our India Division’s results. Accordingly, the India Division’s 2013 results include the months of January through December 2013. Due to the immateriality of the India Division’s results we did not restate the prior year’s operating results for the elimination of this period lag. Therefore, the 2012 results continue to include the months of December 2011 through November 2012. Additionally, the table above compares these months. If we had compared like months in 2013 to 2012, India Division system sales, excluding the impact of foreign currency translation, would have been 2% higher and same-store sales would have been 1% lower versus what is shown above, respectively, for the year ended December 28, 2013.
|
|
|
|
|
|
|
|
|
% B/(W)
|
||||||||||||
Income/(Expense)
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
||||||||||
Corporate G&A
|
|
$
|
(189
|
)
|
|
$
|
(207
|
)
|
|
$
|
(271
|
)
|
|
9
|
|
|
|
24
|
|
|
Unallocated closures and impairments
|
|
(463
|
)
|
|
(295
|
)
|
|
$
|
—
|
|
|
(57
|
)
|
|
|
NM
|
|
|
||
Unallocated Refranchising gain (loss)
|
|
33
|
|
|
100
|
|
|
78
|
|
|
(67
|
)
|
|
|
29
|
|
|
|||
Other unallocated
|
|
(22
|
)
|
|
(6
|
)
|
|
92
|
|
|
(78
|
)
|
|
|
NM
|
|
||||
Interest expense, net
|
|
(130
|
)
|
|
(247
|
)
|
|
(149
|
)
|
|
47
|
|
|
|
(66
|
)
|
|
|||
Income tax provision
|
|
(406
|
)
|
|
(487
|
)
|
|
(537
|
)
|
|
17
|
|
|
|
9
|
|
|
|||
Effective tax rate
|
|
28.5
|
%
|
|
31.4
|
%
|
|
25.0
|
%
|
|
2.9
|
|
ppts.
|
|
(6.4
|
)
|
ppts.
|
|
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Long-term debt obligations
(a)
|
|
$
|
4,561
|
|
|
$
|
395
|
|
|
$
|
953
|
|
|
$
|
754
|
|
|
$
|
2,459
|
|
Capital leases
(b)
|
|
282
|
|
|
20
|
|
|
41
|
|
|
40
|
|
|
181
|
|
|||||
Operating leases
(b)
|
|
5,479
|
|
|
709
|
|
|
1,270
|
|
|
1,056
|
|
|
2,444
|
|
|||||
Purchase obligations
(c)
|
|
781
|
|
|
587
|
|
|
103
|
|
|
69
|
|
|
22
|
|
|||||
Benefit plans
(d)
|
|
179
|
|
|
38
|
|
|
38
|
|
|
34
|
|
|
69
|
|
|||||
Total contractual obligations
|
|
$
|
11,282
|
|
|
$
|
1,749
|
|
|
$
|
2,405
|
|
|
$
|
1,953
|
|
|
$
|
5,175
|
|
(a)
|
Debt amounts include principal maturities and expected interest payments on a nominal basis. Debt amounts exclude a fair value adjustment of $7 million related to interest rate swaps that hedge the fair value of a portion of our debt. See Note 10.
|
(b)
|
These obligations, which are shown on a nominal basis, relate primarily to approximately 7,775 company-owned restaurants. See Note 11.
|
(c)
|
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. We have excluded agreements that are cancelable without penalty. Purchase obligations relate primarily to supply agreements, marketing, information technology, purchases of property, plant and equipment ("PP&E") as well as consulting, maintenance and other agreements.
|
(d)
|
Includes actuarially determined timing of payments from our most significant unfunded pension plan as well as scheduled payments from our deferred compensation plan. This table excludes $129 million of future benefit payments for deferred compensation and other unfunded benefit plans to be paid upon separation of employee's service or retirement from the company, as we cannot reasonably estimate the dates of these future cash payments.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Page Reference
|
|
Consolidated Financial Statements
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Consolidated Statements of Income for the fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
|
|
|
|
|
|
Consolidated Balance Sheets as of December 27, 2014 and December 28, 2013
|
|
|
|
|
|
Consolidated Statements of Shareholders’ Equity for the fiscal years ended
December 27, 2014, December 28, 2013 and December 29, 2012
|
|
|
|
|
|
Notes to Consolidated Financial Statements
|
|
•
|
YUM China (“China” or “China Division”) which includes all operations in mainland China
|
•
|
YUM India ("India" or "India Division") which includes all operations in India, Bangladesh, Nepal and Sri Lanka
|
•
|
The KFC Division which includes all operations of the KFC concept outside of China Division and India Division
|
•
|
The Pizza Hut Division which includes all operations of the Pizza Hut concept outside of China Division and India Division
|
•
|
The Taco Bell Division which includes all operations of the Taco Bell concept outside of India Division
|
Level 1
|
Inputs based upon quoted prices in active markets for identical assets.
|
|
|
Level 2
|
Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.
|
|
|
Level 3
|
Inputs that are unobservable for the asset.
|
|
|
2014
|
|
2013
|
||||
Accounts and notes receivable
|
|
$
|
337
|
|
|
$
|
330
|
|
Allowance for doubtful accounts
|
|
(12
|
)
|
|
(11
|
)
|
||
Accounts and notes receivable, net
|
|
$
|
325
|
|
|
$
|
319
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net Income – YUM! Brands, Inc.
|
|
$
|
1,051
|
|
|
$
|
1,091
|
|
|
$
|
1,597
|
|
Weighted-average common shares outstanding (for basic calculation)
|
|
444
|
|
|
452
|
|
|
461
|
|
|||
Effect of dilutive share-based employee compensation
|
|
9
|
|
|
9
|
|
|
12
|
|
|||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)
|
|
453
|
|
|
461
|
|
|
473
|
|
|||
Basic EPS
|
|
$
|
2.37
|
|
|
$
|
2.41
|
|
|
$
|
3.46
|
|
Diluted EPS
|
|
$
|
2.32
|
|
|
$
|
2.36
|
|
|
$
|
3.38
|
|
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation
(a)
|
|
5.5
|
|
|
4.9
|
|
|
3.1
|
|
(a)
|
These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented.
|
|
2014
|
|
2013
|
|
2012
|
|
Income Statement Classification
|
||||||
Gain on Acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(74
|
)
|
|
Other (income) expense
|
Impairment of Goodwill
|
160
|
|
|
222
|
|
|
—
|
|
|
Closures and Impairment (income) expense
|
|||
Impairment of Trademark
|
284
|
|
|
69
|
|
|
—
|
|
|
Closures and Impairment (income) expense
|
|||
Impairment of PP&E
|
14
|
|
|
4
|
|
|
—
|
|
|
Closures and Impairment (income) expense
|
|||
Impairment of Investment in Little Sheep Meat
|
5
|
|
|
—
|
|
|
—
|
|
|
Closures and Impairment (income) expense
|
|||
Tax Benefit
|
(76
|
)
|
|
(18
|
)
|
|
—
|
|
|
Income tax provision
|
|||
Loss Attributable to Non-Controlling Interest
|
(26
|
)
|
|
(19
|
)
|
|
—
|
|
|
Net Income (loss) noncontrolling interests
|
|||
Net (gain) loss
|
$
|
361
|
|
|
$
|
258
|
|
|
$
|
(74
|
)
|
|
Net Income - YUM! Brands, Inc.
|
|
|
Refranchising (gain) loss
|
|
|
|
|
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
|
|
|
|
||||||
China
|
|
$
|
(17
|
)
|
|
$
|
(5
|
)
|
|
$
|
(17
|
)
|
|
|
|
|
|
KFC Division
|
|
(18
|
)
|
|
(8
|
)
|
|
(3
|
)
|
|
|
|
|
|
|||
Pizza Hut Division
(a)
|
|
4
|
|
|
(3
|
)
|
|
53
|
|
|
|
|
|
|
|||
Taco Bell Division
|
|
(4
|
)
|
|
(84
|
)
|
|
(111
|
)
|
|
|
|
|
|
|||
India
|
|
2
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
Worldwide
|
|
$
|
(33
|
)
|
|
$
|
(100
|
)
|
|
$
|
(78
|
)
|
|
|
|
|
|
(a)
|
During the fourth quarter of 2012, we refranchised our remaining
331
Company-owned Pizza Hut dine-in restaurants in the United Kingdom ("UK"). The franchise agreement for these stores allowed the franchisee to pay continuing franchise fees in the initial years of the agreement at a reduced rate. We agreed to allow the franchisee to pay these reduced fees in part as consideration for their assumption of lease liabilities related to underperforming stores that we anticipated they would close that were part of the refranchising. We recognize the estimated value of terms in franchise agreements entered into concurrently with a refranchising transaction that are not consistent with market terms as part of the upfront refranchising (gain) loss. Accordingly, upon the closing of this refranchising we recognized a loss of
$53 million
representing the estimated value of these reduced continuing fees. The associated deferred credit is being amortized into Pizza Hut Division's Franchise and license fees and income through 2016. This upfront loss largely contributed to a
$70 million
Refranchising loss we recognized during 2012 as a result of this refranchising. Also included in that loss was the write-off of
$14 million
in goodwill allocated to the Pizza Hut UK reporting unit. The remaining carrying value of goodwill allocated at that time to our Pizza Hut UK business of
$87 million
, immediately subsequent to the aforementioned write-off, was determined not to be impaired as the fair value of the Pizza Hut UK reporting unit exceeded its carrying amount. For the year ended December 28, 2013, the refranchising of the Pizza Hut UK dine-in restaurants decreased Company sales by
39%
and increased Franchise and license fees and income and Operating Profit by
3%
and
6%
, respectively, for the Pizza Hut Division versus 2012.
|
|
|
2014
|
||||||||||||||||||||||
|
|
China
|
|
KFC
|
|
Pizza Hut
|
|
Taco Bell
|
|
India
|
|
Worldwide
|
||||||||||||
Store closure (income) costs
(a)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Store impairment charges
|
|
54
|
|
|
7
|
|
|
4
|
|
|
3
|
|
|
1
|
|
|
69
|
|
||||||
Closure and impairment (income) expenses
|
|
$
|
54
|
|
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
72
|
|
|
|
2013
|
||||||||||||||||||||||
|
|
China
|
|
KFC
|
|
Pizza Hut
|
|
Taco Bell
|
|
India
|
|
Worldwide
|
||||||||||||
Store closure (income) costs
(a)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Store impairment charges
|
|
31
|
|
|
4
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|
41
|
|
||||||
Closure and impairment (income) expenses
|
|
$
|
30
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
36
|
|
|
|
2012
|
||||||||||||||||||||||
|
|
China
|
|
KFC
|
|
Pizza Hut
|
|
Taco Bell
|
|
India
|
|
Worldwide
|
||||||||||||
Store closure (income) costs
(a)
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Store impairment charges
|
|
13
|
|
|
11
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
29
|
|
||||||
Closure and impairment (income) expenses
|
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
37
|
|
(a)
|
Store closure (income) costs include the net gain or loss on sales of real estate on which we formerly operated a Company-owned restaurant that was closed, lease reserves established when we cease using a property under an operating lease and subsequent adjustments to those reserves and other facility-related expenses from previously closed stores. Remaining lease obligations for closed stores were not material at December 27, 2014 or December 28, 2013.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash Paid For:
|
|
|
|
|
|
|
||||||
Interest
(a)
|
|
$
|
149
|
|
|
$
|
269
|
|
|
$
|
166
|
|
Income taxes
(b)
|
|
684
|
|
|
489
|
|
|
417
|
|
|||
Significant Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
|
||||||
Capital lease obligations incurred
|
|
$
|
24
|
|
|
$
|
15
|
|
|
$
|
17
|
|
Capital lease obligations relieved, primarily through divestitures and refranchisings
|
|
1
|
|
|
2
|
|
|
112
|
|
|||
Increase in accrued capital expenditures
|
|
15
|
|
|
N/A
|
|
|
35
|
|
(a)
|
2013 includes
$109 million
of cash premiums and fees paid related to the extinguishment of debt, which is the primary component of the
$120 million
loss on debt extinguishment. See Note 4.
|
(b)
|
2014 includes
$200 million
of cash paid related to the resolution of a valuation issue with the Internal Revenue Service related to years 2004-2008. See the Internal Revenue Service Adjustments section of Note 16.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Initial fees, including renewal fees
|
|
$
|
83
|
|
|
$
|
90
|
|
|
$
|
92
|
|
Initial franchise fees included in Refranchising (gain) loss
|
|
(5
|
)
|
|
(13
|
)
|
|
(24
|
)
|
|||
|
|
78
|
|
|
77
|
|
|
68
|
|
|||
Continuing fees and rental income
|
|
1,877
|
|
|
1,823
|
|
|
1,732
|
|
|||
Franchise and license fees and income
|
|
$
|
1,955
|
|
|
$
|
1,900
|
|
|
$
|
1,800
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Equity (income) loss from investments in unconsolidated affiliates
|
|
$
|
(30
|
)
|
|
$
|
(26
|
)
|
|
$
|
(47
|
)
|
Gain upon acquisition of Little Sheep
(a)
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||
China poultry supply insurance recovery
(b)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign exchange net (gain) loss and other
|
|
14
|
|
|
10
|
|
|
6
|
|
|||
Other (income) expense
|
|
$
|
(41
|
)
|
|
$
|
(16
|
)
|
|
$
|
(115
|
)
|
(a)
|
See Note 4.
|
(b)
|
Recovery related to lost profits associated with a 2012 poultry supply incident.
|
Prepaid Expenses and Other Current Assets
|
|
2014
|
|
2013
|
||||
Income tax receivable
|
|
$
|
55
|
|
|
$
|
89
|
|
Assets held for sale
(a)
|
|
14
|
|
|
16
|
|
||
Other prepaid expenses and current assets
|
|
185
|
|
|
181
|
|
||
Prepaid expenses and other current assets
|
|
$
|
254
|
|
|
$
|
286
|
|
(a)
|
Reflects restaurants we have offered for sale to franchisees and excess properties that we do not intend to use for restaurant operations in the future.
|
Property, Plant and Equipment
|
|
2014
|
|
2013
|
||||
Land
|
|
$
|
506
|
|
|
$
|
508
|
|
Buildings and improvements
|
|
4,549
|
|
|
4,393
|
|
||
Capital leases, primarily buildings
|
|
210
|
|
|
199
|
|
||
Machinery and equipment
|
|
2,817
|
|
|
2,750
|
|
||
Property, plant and equipment, gross
|
|
8,082
|
|
|
7,850
|
|
||
Accumulated depreciation and amortization
|
|
(3,584
|
)
|
|
(3,391
|
)
|
||
Property, plant and equipment, net
|
|
$
|
4,498
|
|
|
$
|
4,459
|
|
Accounts Payable and Other Current Liabilities
|
|
2014
|
|
2013
|
||||
Accounts payable
|
|
$
|
694
|
|
|
$
|
692
|
|
Accrued capital expenditures
|
|
250
|
|
|
235
|
|
||
Accrued compensation and benefits
|
|
419
|
|
|
442
|
|
||
Dividends payable
|
|
178
|
|
|
164
|
|
||
Accrued taxes, other than income taxes
|
|
100
|
|
|
93
|
|
||
Other current liabilities
|
|
331
|
|
|
303
|
|
||
Accounts payable and other current liabilities
|
|
$
|
1,972
|
|
|
$
|
1,929
|
|
|
|
China
|
|
KFC
|
|
Pizza Hut
|
|
Taco Bell
|
|
India
|
|
Worldwide
|
||||||||||||
Balance as of December 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill, gross
|
|
$
|
466
|
|
|
$
|
281
|
|
|
$
|
194
|
|
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
1,051
|
|
Accumulated impairment losses
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||||
Goodwill, net
|
|
466
|
|
|
281
|
|
|
177
|
|
|
$
|
110
|
|
|
—
|
|
|
1,034
|
|
|||||
Acquisitions
(a)
|
|
2
|
|
|
75
|
|
|
11
|
|
|
—
|
|
|
2
|
|
|
90
|
|
||||||
Impairment Losses
(c)
|
|
(222
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(222
|
)
|
||||||
Disposals and other, net
(b)
|
|
10
|
|
|
(18
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
(13
|
)
|
||||||
Balance as of December 28, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill, gross
|
|
478
|
|
|
338
|
|
|
204
|
|
|
106
|
|
|
2
|
|
|
1,128
|
|
||||||
Accumulated impairment losses
|
|
(222
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(239
|
)
|
||||||
Goodwill,net
|
|
256
|
|
|
338
|
|
|
187
|
|
|
106
|
|
|
2
|
|
|
889
|
|
||||||
Acquisitions
|
|
—
|
|
|
2
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
10
|
|
||||||
Impairment Losses
(c)
|
|
(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
|
|
(382
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(399
|
)
|
||||||
Goodwill, net
|
|
$
|
89
|
|
|
$
|
312
|
|
|
$
|
183
|
|
|
$
|
114
|
|
|
$
|
2
|
|
|
700
|
|
(a)
|
We recorded goodwill of
$75 million
and
$11 million
in our KFC and Pizza Hut Divisions, respectively, related to the acquisition of 65 KFC and 41 Pizza Hut restaurants in Turkey.
|
(b)
|
Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising.
|
(c)
|
We recorded impairment charges of
$160 million
and
$222 million
in 2014 and 2013, respectively, to write down Little Sheep's goodwill. See Note 4.
|
|
|
2014
|
|
2013
|
||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Definite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Reacquired franchise rights
|
|
$
|
186
|
|
|
$
|
(81
|
)
|
|
$
|
188
|
|
|
$
|
(66
|
)
|
Franchise contract rights
|
|
126
|
|
|
(92
|
)
|
|
130
|
|
|
(90
|
)
|
||||
Lease tenancy rights
|
|
67
|
|
|
(12
|
)
|
|
71
|
|
|
(12
|
)
|
||||
Favorable operating leases
|
|
15
|
|
|
(9
|
)
|
|
20
|
|
|
(12
|
)
|
||||
Other
|
|
52
|
|
|
(25
|
)
|
|
52
|
|
|
(22
|
)
|
||||
|
|
$
|
446
|
|
|
$
|
(219
|
)
|
|
$
|
461
|
|
|
$
|
(202
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
||||||||
KFC trademark
|
|
$
|
31
|
|
|
|
|
$
|
31
|
|
|
|
||||
Little Sheep trademark
(a)
|
|
60
|
|
|
|
|
348
|
|
|
|
||||||
|
|
$
|
91
|
|
|
|
|
$
|
379
|
|
|
|
(a)
|
We recorded an impairment charge of
$284 million
in 2014 to write down the Little Sheep trademark. See Note 4.
|
|
|
2014
|
|
2013
|
||||
Short-term Borrowings
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
264
|
|
|
$
|
71
|
|
Current portion of fair value hedge accounting adjustment
|
|
3
|
|
|
—
|
|
||
|
|
$
|
267
|
|
|
$
|
71
|
|
|
|
|
|
|
||||
Long-term Debt
|
|
|
|
|
||||
Senior Unsecured Notes
|
|
$
|
2,746
|
|
|
$
|
2,803
|
|
Unsecured Revolving Credit Facility, expires March 2017
|
|
416
|
|
|
—
|
|
||
Capital lease obligations (See Note 11)
|
|
175
|
|
|
172
|
|
||
|
|
3,337
|
|
|
2,975
|
|
||
Less current maturities of long-term debt
|
|
(264
|
)
|
|
(71
|
)
|
||
Long-term debt excluding long-term portion of hedge accounting adjustment
|
|
3,073
|
|
|
2,904
|
|
||
Long-term portion of fair value hedge accounting adjustment
|
|
4
|
|
|
14
|
|
||
Long-term debt including hedge accounting adjustment
|
|
$
|
3,077
|
|
|
$
|
2,918
|
|
|
|
|
|
|
|
Interest Rate
|
||||
Issuance Date
(a)
|
|
Maturity Date
|
|
Principal Amount (in millions)
|
|
Stated
|
|
Effective
(b)
|
||
April 2006
|
|
April 2016
|
|
$
|
300
|
|
|
6.25%
|
|
6.03%
|
October 2007
|
|
March 2018
|
|
$
|
325
|
|
|
6.25%
|
|
6.36%
|
October 2007
|
|
November 2037
|
|
$
|
325
|
|
|
6.88%
|
|
7.45%
|
August 2009
|
|
September 2015
|
|
$
|
250
|
|
|
4.25%
|
|
4.44%
|
August 2009
|
|
September 2019
|
|
$
|
250
|
|
|
5.30%
|
|
5.59%
|
August 2010
|
|
November 2020
|
|
$
|
350
|
|
|
3.88%
|
|
4.01%
|
August 2011
|
|
November 2021
|
|
$
|
350
|
|
|
3.75%
|
|
3.88%
|
October 2013
|
|
November 2023
|
|
$
|
325
|
|
|
3.88%
|
|
4.01%
|
October 2013
|
|
November 2043
|
|
$
|
275
|
|
|
5.35%
|
|
5.42%
|
(a)
|
Interest payments commenced approximately
six
months after issuance date and are payable
semi-annually
thereafter.
|
(b)
|
Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs; and (3) gain or loss upon settlement of related treasury locks and forward-starting interest rate swaps utilized to hedge the interest rate risk prior to the debt issuance. Excludes the effect of any swaps that remain outstanding.
|
Year ended:
|
|
||
2015
|
$
|
250
|
|
2016
|
300
|
|
|
2017
|
416
|
|
|
2018
|
325
|
|
|
2019
|
250
|
|
|
Thereafter
|
1,625
|
|
|
Total
|
$
|
3,166
|
|
|
|
Commitments
|
|
Lease Receivables
|
||||||||||||
|
|
Capital
|
|
Operating
|
|
Direct
Financing
|
|
Operating
|
||||||||
2015
|
|
$
|
20
|
|
|
$
|
709
|
|
|
$
|
2
|
|
|
$
|
56
|
|
2016
|
|
21
|
|
|
661
|
|
|
2
|
|
|
52
|
|
||||
2017
|
|
20
|
|
|
609
|
|
|
2
|
|
|
47
|
|
||||
2018
|
|
20
|
|
|
555
|
|
|
2
|
|
|
44
|
|
||||
2019
|
|
20
|
|
|
501
|
|
|
1
|
|
|
38
|
|
||||
Thereafter
|
|
181
|
|
|
2,444
|
|
|
4
|
|
|
116
|
|
||||
|
|
$
|
282
|
|
|
$
|
5,479
|
|
|
$
|
13
|
|
|
$
|
353
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Rental expense
|
|
|
|
|
|
|
||||||
Minimum
|
|
$
|
766
|
|
|
$
|
759
|
|
|
$
|
721
|
|
Contingent
|
|
302
|
|
|
293
|
|
|
290
|
|
|||
|
|
$
|
1,068
|
|
|
$
|
1,052
|
|
|
$
|
1,011
|
|
Rental income
|
|
$
|
103
|
|
|
$
|
94
|
|
|
$
|
77
|
|
|
|
Fair Value
|
|||||||||
|
|
Level
|
|
2014
|
|
2013
|
|||||
Foreign Currency Forwards, net
|
|
2
|
|
|
$
|
24
|
|
|
$
|
1
|
|
Interest Rate Swaps, net
|
|
2
|
|
|
10
|
|
|
17
|
|
||
Other Investments
|
|
1
|
|
|
21
|
|
|
18
|
|
||
Total
|
|
|
|
$
|
55
|
|
|
$
|
36
|
|
|
|
2014
|
|
2013
|
|
||||
Little Sheep impairment (Level 3)
(a)
|
|
$
|
463
|
|
|
$
|
295
|
|
|
Refranchising related impairment - other (Level 2)
(b)
|
|
9
|
|
|
—
|
|
|
||
Restaurant-level impairment (Level 3)
(c)
|
|
46
|
|
|
19
|
|
|
||
Total
|
|
$
|
518
|
|
|
$
|
314
|
|
|
(b)
|
Refranchising related impairment results from writing down the assets of restaurants or restaurant groups offered for refranchising, including certain instances where a decision has been made to refranchise restaurants that are deemed to be impaired. The fair value measurements used in our impairment evaluation are based on either actual bids received from potential buyers (Level 2), or on estimates of the sales prices we anticipated receiving from a buyer for the restaurant or restaurant groups (Level 3). The remaining net book value of these restaurants at December 27, 2014 is insignificant.
|
(c)
|
Restaurant-level impairment charges are recorded in Closures and impairment (income) expenses and resulted primarily from our semi-annual impairment evaluation of long-lived assets of individual restaurants that were being operated at the time of impairment and had not been offered for refranchising. The fair value measurements used in these impairment evaluations were based on discounted cash flow estimates using unobservable inputs (Level 3). The remaining net book value of assets measured at fair value during the years ended December 27, 2014 and December 28, 2013 is insignificant.
|
|
|
2014
|
|
2013
|
||||
Change in benefit obligation
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
1,025
|
|
|
$
|
1,290
|
|
Service cost
|
|
17
|
|
|
21
|
|
||
Interest cost
|
|
54
|
|
|
54
|
|
||
Plan amendments
|
|
1
|
|
|
—
|
|
||
Curtailments
|
|
(2
|
)
|
|
(3
|
)
|
||
Special termination benefits
|
|
3
|
|
|
5
|
|
||
Benefits paid
|
|
(65
|
)
|
|
(21
|
)
|
||
Settlements
(a)(b)
|
|
(17
|
)
|
|
(151
|
)
|
||
Actuarial (gain) loss
|
|
290
|
|
|
(164
|
)
|
||
Administrative expense
|
|
(5
|
)
|
|
(6
|
)
|
||
Benefit obligation at end of year
|
|
$
|
1,301
|
|
|
$
|
1,025
|
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
933
|
|
|
$
|
945
|
|
Actual return on plan assets
|
|
124
|
|
|
116
|
|
||
Employer contributions
|
|
21
|
|
|
22
|
|
||
Settlement payments
(a)
|
|
(17
|
)
|
|
(123
|
)
|
||
Benefits paid
|
|
(65
|
)
|
|
(21
|
)
|
||
Administrative expenses
|
|
(5
|
)
|
|
(6
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
991
|
|
|
$
|
933
|
|
Funded status at end of year
|
|
$
|
(310
|
)
|
|
$
|
(92
|
)
|
(a)
|
For discussion of the settlement payments and settlement losses, see Components of net periodic benefit cost below.
|
(b)
|
2013 includes the transfer of certain non-qualified pension benefits into a defined benefit plan not included in the table.
|
Net periodic benefit cost
|
|
2014
|
|
2013
|
|
2012
|
||||||
Service cost
|
|
$
|
17
|
|
|
$
|
21
|
|
|
$
|
26
|
|
Interest cost
|
|
54
|
|
|
54
|
|
|
66
|
|
|||
Amortization of prior service cost
(a)
|
|
1
|
|
|
2
|
|
|
1
|
|
|||
Expected return on plan assets
|
|
(56
|
)
|
|
(59
|
)
|
|
(71
|
)
|
|||
Amortization of net loss
|
|
17
|
|
|
48
|
|
|
63
|
|
|||
Net periodic benefit cost
|
|
$
|
33
|
|
|
$
|
66
|
|
|
$
|
85
|
|
Additional (gain) loss recognized due to:
Settlements
(b)
|
|
$
|
6
|
|
|
$
|
30
|
|
|
$
|
89
|
|
Special termination benefits
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
3
|
|
(a)
|
Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.
|
(b)
|
Settlement losses result when benefit payments exceed the sum of the service cost and interest cost within a plan during the year. During the fourth quarter of 2012 and continuing through 2013, the Company allowed certain former employees with deferred vested balances an opportunity to voluntarily elect an early payout of their pension benefits. The majority of these payouts were funded from existing pension plan assets. See Note 4.
|
|
|
2014
|
|
2013
|
||||
Level 2:
|
|
|
|
|
||||
Cash Equivalents
(a)
|
|
$
|
5
|
|
|
$
|
5
|
|
Equity Securities – U.S. Large cap
(b)
|
|
298
|
|
|
329
|
|
||
Equity Securities – U.S. Mid cap
(b)
|
|
50
|
|
|
55
|
|
||
Equity Securities – U.S. Small cap
(b)
|
|
50
|
|
|
53
|
|
||
Equity Securities – Non-U.S.
(b)
|
|
91
|
|
|
110
|
|
||
Fixed Income Securities – U.S. Corporate
(b)
|
|
305
|
|
|
234
|
|
||
Fixed Income Securities – U.S. Government and Government Agencies
(c)
|
|
178
|
|
|
129
|
|
||
Fixed Income Securities – Other
(d)
|
|
11
|
|
|
15
|
|
||
Total fair value of plan assets
(e)
|
|
$
|
988
|
|
|
$
|
930
|
|
(a)
|
Short-term investments in money market funds
|
(b)
|
Securities held in common trusts
|
(c)
|
Investments held directly by the Plan
|
(d)
|
Includes securities held in common trusts and investments held directly by the Plan
|
(e)
|
2014 and 2013 both exclude net unsettled trades receivable of
$3 million
|
Year ended:
|
|
|
||
2015
|
|
$
|
72
|
|
2016
|
|
53
|
|
|
2017
|
|
51
|
|
|
2018
|
|
55
|
|
|
2019
|
|
57
|
|
|
2020 - 2024
|
|
299
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Risk-free interest rate
|
|
1.6
|
%
|
|
0.8
|
%
|
|
0.8
|
%
|
Expected term (years)
|
|
6.2
|
|
|
6.2
|
|
|
6.0
|
|
Expected volatility
|
|
29.7
|
%
|
|
29.9
|
%
|
|
29.0
|
%
|
Expected dividend yield
|
|
2.1
|
%
|
|
2.1
|
%
|
|
1.8
|
%
|
|
|
Shares
(in thousands)
|
|
Weighted-Average Exercise
Price
|
|
Weighted- Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value (in millions)
|
||||||||
Outstanding at the beginning of the year
|
|
27,713
|
|
|
|
|
$
|
41.77
|
|
|
|
|
|
|||
Granted
|
|
3,619
|
|
|
|
|
70.85
|
|
|
|
|
|
||||
Exercised
|
|
(3,549
|
)
|
|
|
|
30.35
|
|
|
|
|
|
||||
Forfeited or expired
|
|
(611
|
)
|
|
|
|
61.48
|
|
|
|
|
|
||||
Outstanding at the end of the year
|
|
27,172
|
|
(a)
|
|
|
$
|
46.68
|
|
|
5.54
|
|
|
$
|
703
|
|
Exercisable at the end of the year
|
|
17,671
|
|
|
|
|
$
|
37.62
|
|
|
4.25
|
|
|
$
|
628
|
|
(a)
|
Outstanding awards include
1,968
options and
25,204
SARs with weighted average exercise prices of
$43.71
and
$46.91
, respectively.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Options and SARs
|
|
$
|
48
|
|
|
$
|
44
|
|
|
$
|
42
|
|
Restricted Stock Units
|
|
6
|
|
|
6
|
|
|
5
|
|
|||
Performance Share Units
|
|
1
|
|
|
(1
|
)
|
|
3
|
|
|||
Total Share-based Compensation Expense
|
|
$
|
55
|
|
|
$
|
49
|
|
|
$
|
50
|
|
Deferred Tax Benefit recognized
|
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
||||||
EID compensation expense not share-based
|
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
5
|
|
|
|
Shares Repurchased
(thousands)
|
|
|
Dollar Value of Shares
Repurchased
|
|
|||||||||||||||||||||
Authorization Date
|
|
2014
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|||
November 2014
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
November 2013
|
|
8,488
|
|
|
|
—
|
|
|
|
—
|
|
|
|
617
|
|
|
|
—
|
|
|
|
—
|
|
|
|||
November 2012
|
|
2,737
|
|
|
|
10,922
|
|
|
|
1,069
|
|
|
|
203
|
|
|
|
750
|
|
|
|
47
|
|
|
|||
November 2011
|
|
—
|
|
|
|
—
|
|
|
|
11,035
|
|
|
|
—
|
|
|
|
—
|
|
|
|
750
|
|
|
|||
January 2011
|
|
—
|
|
|
|
—
|
|
|
|
2,787
|
|
|
|
—
|
|
|
|
—
|
|
|
|
188
|
|
|
|||
Total
|
|
11,225
|
|
|
|
10,922
|
|
(a)
|
|
14,891
|
|
(a)
|
|
$
|
820
|
|
|
|
$
|
750
|
|
(a)
|
|
$
|
985
|
|
(a)
|
(a)
|
2013 amount excludes and 2012 amount includes the effect of
$20 million
in share repurchases (
0.3 million
shares) with trade dates prior to the 2012 fiscal year end but with settlement dates subsequent to the 2012 fiscal year end.
|
|
|
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature
|
|
Pension and Post-Retirement Benefits
(a)
|
|
Derivative Instruments
|
|
Total
|
||||||||
Balance at December 29, 2012, net of tax
|
|
$
|
166
|
|
|
$
|
(286
|
)
|
|
$
|
(12
|
)
|
|
$
|
(132
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising during the year classified into accumulated OCI, net of tax
|
|
4
|
|
|
136
|
|
|
4
|
|
|
144
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(Gains) losses reclassified from accumulated OCI, net of tax
|
|
—
|
|
|
53
|
|
|
(1
|
)
|
|
52
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OCI, net of tax
|
|
4
|
|
|
189
|
|
|
3
|
|
|
196
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 28, 2013, net of tax
|
|
170
|
|
|
(97
|
)
|
|
(9
|
)
|
|
64
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) arising during the year classified into accumulated OCI, net of tax
|
|
(143
|
)
|
|
(131
|
)
|
|
15
|
|
|
(259
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(Gains) losses reclassified from accumulated OCI, net of tax
|
|
2
|
|
|
18
|
|
|
(15
|
)
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OCI, net of tax
|
|
(141
|
)
|
|
(113
|
)
|
|
—
|
|
|
(254
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 27, 2014, net of tax
|
$
|
29
|
|
|
$
|
(210
|
)
|
|
$
|
(9
|
)
|
|
$
|
(190
|
)
|
(a)
|
Amounts reclassified from accumulated OCI for pension and post-retirement benefit plan losses during 2014 include amortization of net losses of
$20 million
, settlement charges of
$6 million
, amortization of prior service cost of
$1 million
and related income tax benefit of
$9 million
. Amounts reclassified from accumulated OCI for pension and post-retirement benefit plan losses during 2013 include amortization of net losses of
$51 million
, settlement charges of
$30 million
, amortization of prior service cost of
$2 million
and the related income tax benefit of
$30 million
. See Note 13.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
U.S.
|
|
$
|
506
|
|
|
$
|
464
|
|
|
$
|
504
|
|
Foreign
|
|
921
|
|
|
1,087
|
|
|
1,641
|
|
|||
|
|
$
|
1,427
|
|
|
$
|
1,551
|
|
|
$
|
2,145
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
Federal
|
|
$
|
255
|
|
|
$
|
159
|
|
|
$
|
160
|
|
|
|
Foreign
|
|
321
|
|
|
330
|
|
|
314
|
|
|||
|
|
State
|
|
2
|
|
|
22
|
|
|
35
|
|
|||
|
|
|
|
$
|
578
|
|
|
$
|
511
|
|
|
509
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deferred:
|
|
Federal
|
|
$
|
(67
|
)
|
|
$
|
42
|
|
|
91
|
|
|
|
|
Foreign
|
|
(106
|
)
|
|
(53
|
)
|
|
(57
|
)
|
|||
|
|
State
|
|
1
|
|
|
(13
|
)
|
|
(6
|
)
|
|||
|
|
|
|
(172
|
)
|
|
(24
|
)
|
|
28
|
|
|||
|
|
|
|
$
|
406
|
|
|
$
|
487
|
|
|
$
|
537
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
U.S. federal statutory rate
|
|
$
|
500
|
|
|
35.0
|
%
|
|
$
|
543
|
|
|
35.0
|
%
|
|
$
|
751
|
|
|
35.0
|
%
|
State income tax, net of federal tax benefit
|
|
8
|
|
|
0.6
|
|
|
3
|
|
|
0.2
|
|
|
4
|
|
|
0.2
|
|
|||
Statutory rate differential attributable to foreign operations
|
|
(168
|
)
|
|
(11.7
|
)
|
|
(177
|
)
|
|
(11.4
|
)
|
|
(165
|
)
|
|
(7.7
|
)
|
|||
Adjustments to reserves and prior years
|
|
(5
|
)
|
|
(0.3
|
)
|
|
49
|
|
|
3.1
|
|
|
(47
|
)
|
|
(2.2
|
)
|
|||
Change in valuation allowances
|
|
35
|
|
|
2.4
|
|
|
23
|
|
|
1.5
|
|
|
14
|
|
|
0.6
|
|
|||
Other, net
|
|
36
|
|
|
2.5
|
|
|
46
|
|
|
3.0
|
|
|
(20
|
)
|
|
(0.9
|
)
|
|||
Effective income tax rate
|
|
$
|
406
|
|
|
28.5
|
%
|
|
$
|
487
|
|
|
31.4
|
%
|
|
$
|
537
|
|
|
25.0
|
%
|
|
|
2014
|
|
2013
|
||||
Operating losses and tax credit carryforwards
|
|
$
|
433
|
|
|
$
|
310
|
|
Employee benefits
|
|
238
|
|
|
182
|
|
||
Share-based compensation
|
|
119
|
|
|
118
|
|
||
Self-insured casualty claims
|
|
42
|
|
|
48
|
|
||
Lease-related liabilities
|
|
119
|
|
|
120
|
|
||
Various liabilities
|
|
73
|
|
|
88
|
|
||
Property, plant and equipment
|
|
39
|
|
|
42
|
|
||
Deferred income and other
|
|
102
|
|
|
58
|
|
||
Gross deferred tax assets
|
|
1,165
|
|
|
966
|
|
||
Deferred tax asset valuation allowances
|
|
(228
|
)
|
|
(203
|
)
|
||
Net deferred tax assets
|
|
$
|
937
|
|
|
$
|
763
|
|
Intangible assets, including goodwill
|
|
$
|
(148
|
)
|
|
$
|
(233
|
)
|
Property, plant and equipment
|
|
(63
|
)
|
|
(93
|
)
|
||
Other
|
|
(104
|
)
|
|
(55
|
)
|
||
Gross deferred tax liabilities
|
|
$
|
(315
|
)
|
|
$
|
(381
|
)
|
Net deferred tax assets (liabilities)
|
|
$
|
622
|
|
|
$
|
382
|
|
|
|
Year of Expiration
|
|
|
||||||||||||||||
|
|
2015
|
|
2016-2019
|
|
2020-2034
|
|
Indefinitely
|
|
Total
|
||||||||||
Foreign
|
|
$
|
62
|
|
|
$
|
192
|
|
|
$
|
96
|
|
|
$
|
324
|
|
|
$
|
674
|
|
U.S. state
|
|
18
|
|
|
90
|
|
|
888
|
|
|
—
|
|
|
996
|
|
|||||
U.S. federal
|
|
—
|
|
|
89
|
|
|
157
|
|
|
—
|
|
|
246
|
|
|||||
|
|
$
|
80
|
|
|
$
|
371
|
|
|
$
|
1,141
|
|
|
$
|
324
|
|
|
$
|
1,916
|
|
|
|
2014
|
|
2013
|
||||
Beginning of Year
|
|
$
|
243
|
|
|
$
|
309
|
|
Additions on tax positions - current year
|
|
19
|
|
|
19
|
|
||
Additions for tax positions - prior years
|
|
31
|
|
|
55
|
|
||
Reductions for tax positions - prior years
|
|
(20
|
)
|
|
(102
|
)
|
||
Reductions for settlements
|
|
(144
|
)
|
|
(23
|
)
|
||
Reductions due to statute expiration
|
|
(13
|
)
|
|
(16
|
)
|
||
Foreign currency translation adjustment
|
|
(1
|
)
|
|
1
|
|
||
End of Year
|
|
$
|
115
|
|
|
$
|
243
|
|
|
|
2014
|
|
2013
|
||||
Accrued interest and penalties
|
|
$
|
5
|
|
|
$
|
64
|
|
|
|
Revenues
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
China
|
|
$
|
6,934
|
|
|
$
|
6,905
|
|
|
$
|
6,898
|
|
KFC Division
(a)
|
|
3,193
|
|
|
3,036
|
|
|
3,014
|
|
|||
Pizza Hut Division
(a)
|
|
1,148
|
|
|
1,147
|
|
|
1,510
|
|
|||
Taco Bell Division
(a)
|
|
1,863
|
|
|
1,869
|
|
|
2,109
|
|
|||
India
|
|
141
|
|
|
127
|
|
|
102
|
|
|||
|
|
$
|
13,279
|
|
|
$
|
13,084
|
|
|
$
|
13,633
|
|
|
|
Operating Profit; Interest Expense, Net; and
Income Before Income Taxes
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
China
(b)
|
|
$
|
713
|
|
|
$
|
777
|
|
|
$
|
1,015
|
|
KFC Division
|
|
708
|
|
|
649
|
|
|
626
|
|
|||
Pizza Hut Division
|
|
295
|
|
|
339
|
|
|
320
|
|
|||
Taco Bell Division
|
|
480
|
|
|
456
|
|
|
435
|
|
|||
India
|
|
(9
|
)
|
|
(15
|
)
|
|
(1
|
)
|
|||
Unallocated restaurant costs
(c)(d)
|
|
(1
|
)
|
|
—
|
|
|
16
|
|
|||
Unallocated and corporate expenses
(c)(e)
|
|
(189
|
)
|
|
(207
|
)
|
|
(271
|
)
|
|||
Unallocated Closures and impairment expense
(c)(f)
|
|
(463
|
)
|
|
(295
|
)
|
|
—
|
|
|||
Unallocated Other income (expense)
(c)(g)
|
|
(10
|
)
|
|
(6
|
)
|
|
76
|
|
|||
Unallocated Refranchising gain (loss)
(c)(m)
|
|
33
|
|
|
100
|
|
|
78
|
|
|||
Operating Profit
|
|
1,557
|
|
|
1,798
|
|
|
2,294
|
|
|||
Interest expense, net
(c)(h)
|
|
(130
|
)
|
|
(247
|
)
|
|
(149
|
)
|
|||
Income Before Income Taxes
|
|
$
|
1,427
|
|
|
$
|
1,551
|
|
|
$
|
2,145
|
|
|
|
Depreciation and Amortization
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
China
|
|
$
|
411
|
|
|
$
|
394
|
|
|
$
|
337
|
|
KFC Division
|
|
187
|
|
|
190
|
|
|
161
|
|
|||
Pizza Hut Division
|
|
39
|
|
|
36
|
|
|
55
|
|
|||
Taco Bell Division
|
|
83
|
|
|
84
|
|
|
98
|
|
|||
India
|
|
10
|
|
|
9
|
|
|
6
|
|
|||
Corporate
|
|
9
|
|
|
8
|
|
|
8
|
|
|||
|
|
$
|
739
|
|
|
$
|
721
|
|
|
$
|
665
|
|
|
|
Capital Spending
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
China
|
|
$
|
525
|
|
|
$
|
568
|
|
|
$
|
655
|
|
KFC Division
|
|
273
|
|
|
294
|
|
|
259
|
|
|||
Pizza Hut Division
|
|
62
|
|
|
52
|
|
|
52
|
|
|||
Taco Bell Division
|
|
143
|
|
|
100
|
|
|
113
|
|
|||
India
|
|
21
|
|
|
31
|
|
|
18
|
|
|||
Corporate
|
|
9
|
|
|
4
|
|
|
2
|
|
|||
|
|
$
|
1,033
|
|
|
$
|
1,049
|
|
|
$
|
1,099
|
|
|
|
Identifiable Assets
|
||||||
|
|
2014
|
|
2013
|
||||
China
(i)
|
|
$
|
3,208
|
|
|
$
|
3,720
|
|
KFC Division
(l)
|
|
2,331
|
|
|
2,452
|
|
||
Pizza Hut Division
(l)
|
|
711
|
|
|
703
|
|
||
Taco Bell Division
(l)
|
|
1,084
|
|
|
1,017
|
|
||
India
|
|
118
|
|
|
99
|
|
||
Corporate
(j)(l)
|
|
893
|
|
|
704
|
|
||
|
|
$
|
8,345
|
|
|
$
|
8,695
|
|
|
|
Long-Lived Assets
(k)
|
||||||
|
|
2014
|
|
2013
|
||||
China
|
|
$
|
2,217
|
|
|
$
|
2,667
|
|
KFC Division
|
|
1,823
|
|
|
1,930
|
|
||
Pizza Hut Division
|
|
433
|
|
|
424
|
|
||
Taco Bell Division
|
|
920
|
|
|
847
|
|
||
India
|
|
72
|
|
|
66
|
|
||
Corporate
|
|
51
|
|
|
52
|
|
||
|
|
$
|
5,516
|
|
|
$
|
5,986
|
|
(a)
|
U.S. revenues included in the combined KFC, Pizza Hut and Taco Bell Divisions totaled
$2,959 million
,
$2,953 million
and
$3,352 million
in
2014
,
2013
and
2012
, respectively.
|
(b)
|
Includes equity income from investments in unconsolidated affiliates of
$30 million
,
$26 million
and
$47 million
in
2014
,
2013
and
2012
, respectively.
|
(c)
|
Amounts have not been allocated to any segment for performance reporting purposes.
|
(d)
|
2012
includes depreciation reductions arising from the impairments of Pizza Hut UK restaurants we later sold in 2012 of
$13 million
. See Note 4.
|
(e)
|
2013
and
2012
include pension settlement charges of
$22 million
and
$87 million
, respectively.
|
(f)
|
Represents
2014
and
2013
impairment losses related to Little Sheep. See Note 4.
|
(g)
|
2012 includes gain upon acquisition of Little Sheep of
$74 million
. See Note 4.
|
(h)
|
2013
includes
$118 million
of premiums and other costs related to the extinguishment of debt. See Note 4.
|
(i)
|
China includes investments in
4
unconsolidated affiliates totaling
$52 million
,
$53 million
and
$72 million
for
2014
,
2013
and
2012
, respectively.
|
(j)
|
Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office facilities.
|
(k)
|
Includes property, plant and equipment, net, goodwill, and intangible assets, net.
|
(l)
|
U.S. identifiable assets included in the combined Corporate and KFC, Pizza Hut and Taco Bell Divisions totaled
$1,952 million
and
$2,061 million
in
2014
and
2013
, respectively.
|
(m)
|
In
2014
,
2013
and
2012
, we recorded pre-tax refranchising gains of
$6 million
,
$91 million
and
$122 million
, respectively, in the U.S. The gains in
2013
and
2012
were primarily due to gains on sales of Taco Bell restaurants.
|
|
|
Beginning Balance
|
|
Expense
|
|
Payments
|
|
Ending Balance
|
||||||
2014 Activity
|
|
$
|
128
|
|
|
42
|
|
|
(54
|
)
|
|
$
|
116
|
|
2013 Activity
|
|
$
|
142
|
|
|
47
|
|
|
(61
|
)
|
|
$
|
128
|
|
|
|
2014
|
||||||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company sales
|
|
$
|
2,292
|
|
|
$
|
2,758
|
|
|
$
|
2,891
|
|
|
$
|
3,383
|
|
|
$
|
11,324
|
|
Franchise and license fees and income
|
|
432
|
|
|
446
|
|
|
463
|
|
|
614
|
|
|
1,955
|
|
|||||
Total revenues
|
|
2,724
|
|
|
3,204
|
|
|
3,354
|
|
|
3,997
|
|
|
13,279
|
|
|||||
Restaurant profit
|
|
441
|
|
|
428
|
|
|
429
|
|
|
344
|
|
|
1,642
|
|
|||||
Operating Profit
(a)
|
|
571
|
|
|
479
|
|
|
550
|
|
|
(43
|
)
|
|
1,557
|
|
|||||
Net Income – YUM! Brands, Inc.
|
|
399
|
|
|
334
|
|
|
404
|
|
|
(86
|
)
|
|
1,051
|
|
|||||
Basic earnings per common share
|
|
0.89
|
|
|
0.75
|
|
|
0.91
|
|
|
(0.20
|
)
|
|
2.37
|
|
|||||
Diluted earnings per common share
|
|
0.87
|
|
|
0.73
|
|
|
0.89
|
|
|
(0.20
|
)
|
|
2.32
|
|
|||||
Dividends declared per common share
|
|
0.37
|
|
|
0.37
|
|
|
—
|
|
|
0.82
|
|
|
1.56
|
|
|
|
2013
|
||||||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company sales
|
|
$
|
2,099
|
|
|
$
|
2,474
|
|
|
$
|
3,021
|
|
|
$
|
3,590
|
|
|
$
|
11,184
|
|
Franchise and license fees and income
|
|
436
|
|
|
430
|
|
|
445
|
|
|
589
|
|
|
1,900
|
|
|||||
Total revenues
|
|
2,535
|
|
|
2,904
|
|
|
3,466
|
|
|
4,179
|
|
|
13,084
|
|
|||||
Restaurant profit
|
|
333
|
|
|
310
|
|
|
531
|
|
|
509
|
|
|
1,683
|
|
|||||
Operating Profit
(b)
|
|
487
|
|
|
390
|
|
|
350
|
|
|
571
|
|
|
1,798
|
|
|||||
Net Income – YUM! Brands, Inc.
(c)
|
|
337
|
|
|
281
|
|
|
152
|
|
|
321
|
|
|
1,091
|
|
|||||
Basic earnings per common share
|
|
0.74
|
|
|
0.62
|
|
|
0.34
|
|
|
0.72
|
|
|
2.41
|
|
|||||
Diluted earnings per common share
|
|
0.72
|
|
|
0.61
|
|
|
0.33
|
|
|
0.70
|
|
|
2.36
|
|
|||||
Dividends declared per common share
|
|
0.335
|
|
|
0.335
|
|
|
—
|
|
|
0.74
|
|
|
1.41
|
|
(a)
|
Includes a non-cash charge of
$463 million
in the fourth quarter related primarily to the impairment of Little Sheep intangible assets. See Note 4.
|
(b)
|
Includes a non-cash charge of
$295 million
in the third quarter related primarily to the impairment of Little Sheep intangible assets and net U.S. refranchising gains of
$17 million
,
$28 million
,
$37 million
and
$9 million
in the first, second, third and fourth quarters, respectively. See Note 4.
|
(c)
|
Includes an after-tax charge of
$75 million
in the fourth quarter related to the repurchase of Senior Unsecured Notes. See Note 4.
|
Item 9.
|
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
(1
|
)
|
|
Financial Statements: Consolidated Financial Statements filed as part of this report are listed under Part II, Item 8 of this Form 10-K.
|
|
|
|
|
|
|
(2
|
)
|
|
Financial Statement Schedules: No schedules are required because either the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements thereto filed as a part of this Form 10-K.
|
|
|
|
|
|
|
(3
|
)
|
|
Exhibits: The exhibits listed in the accompanying Exhibit Index are filed as part of this Form 10-K. The Index to Exhibits specifically identifies each management contract or compensatory plan required to be filed as an exhibit to this Form 10-K.
|
|
SIGNATURES
|
Date:
|
February 17, 2015
|
|
YUM! BRANDS, INC.
|
By:
|
/s/ Greg Creed
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David C. Novak
|
|
Executive Chairman
|
|
February 17, 2015
|
David C. Novak
|
|
|
|
|
|
|
|
|
|
/s/ Greg Creed
|
|
Chief Executive Officer
|
|
February 17, 2015
|
Greg Creed
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ Patrick J. Grismer
|
|
Chief Financial Officer
|
|
February 17, 2015
|
Patrick J. Grismer
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ David E. Russell
|
|
Vice President, Finance and
Corporate Controller
|
|
February 17, 2015
|
David E. Russell
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/s/ Michael J. Cavanagh
|
|
Director
|
|
February 17, 2015
|
Michael J. Cavanagh
|
|
|
|
|
|
|
|
|
|
/s/ David W. Dorman
|
|
Director
|
|
February 17, 2015
|
David W. Dorman
|
|
|
|
|
|
|
|
|
|
/s/ Massimo Ferragamo
|
|
Director
|
|
February 17, 2015
|
Massimo Ferragamo
|
|
|
|
|
|
|
|
|
|
/s/ Mirian Graddick-Weir
|
|
Director
|
|
February 17, 2015
|
Mirian Graddick-Weir
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Bonnie G. Hill
|
|
Director
|
|
February 17, 2015
|
Bonnie G. Hill
|
|
|
|
|
|
|
|
|
|
/s/ Jonathan S. Linen
|
|
Director
|
|
February 17, 2015
|
Jonathan S. Linen
|
|
|
|
|
|
|
|
|
|
/s/ Thomas C. Nelson
|
|
Director
|
|
February 17, 2015
|
Thomas C. Nelson
|
|
|
|
|
|
|
|
|
|
/s/ Thomas M. Ryan
|
|
Director
|
|
February 17, 2015
|
Thomas M. Ryan
|
|
|
|
|
|
|
|
|
|
/s/ Elane Stock
|
|
Director
|
|
February 17, 2015
|
Elane Stock
|
|
|
|
|
|
|
|
|
|
/s/ Jing-Shyh S. Su
|
|
Vice-Chairman of the Board
|
|
February 17, 2015
|
Jing-Shyh S. Su
|
|
|
|
|
|
|
|
|
|
/s/ Robert D. Walter
|
|
Director
|
|
February 17, 2015
|
Robert D. Walter
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
||
|
|
|
||
3.1
|
|
Restated Articles of Incorporation of YUM, effective May 26, 2011, which is incorporated herein by reference from Exhibit 3.1 to YUM's Report on Form 8-K filed on May 31, 2011.
|
||
|
|
|
||
3.2
|
|
Amended and restated Bylaws of YUM, effective May 1, 2014, which are incorporated herein by reference from Exhibit 3.1 to YUM's Report on Form 8-K filed on May 6, 2014.
|
||
|
|
|
||
4.1
|
|
Indenture, dated as of May 1, 1998, between YUM and The Bank of New York Mellon Trust Company, N.A., successor in interest to The First National Bank of Chicago, which is incorporated herein by reference from Exhibit 4.1 to YUM's Report on Form 8-K filed on May 13, 1998.
|
||
|
|
|
|
|
|
|
(i)
|
6.25% Senior Notes due April 15, 2016 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.2 to YUM's Report on Form 8-K filed on April 17, 2006.
|
|
|
|
|
|
|
|
|
(ii)
|
6.25% Senior Notes due March 15, 2018 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.2 to YUM's Report on Form 8-K filed on October 22, 2007.
|
|
|
|
|
||
|
|
(iii)
|
6.875% Senior Notes due November 15, 2037 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.3 to YUM's Report on Form 8-K filed on October 22, 2007.
|
|
|
|
|
|
|
|
|
(iv)
|
4.25% Senior Notes due September 15, 2015 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.1 to YUM's Report on Form 8-K filed on August 25, 2009.
|
|
|
|
|
|
|
|
|
(v)
|
5.30% Senior Notes due September 15, 2019 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.1 to YUM's Report on Form 8-K filed on August 25, 2009.
|
|
|
|
|
||
|
|
(vi)
|
3.875% Senior Notes due November 1, 2020 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.2 to YUM's Report on Form 8-K filed on August 31, 2010.
|
|
|
|
|
|
|
|
|
(vii)
|
3.750% Senior Notes due November 1, 2021 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.2 to YUM's Report on Form 8-K filed August 29, 2011.
|
|
|
|
|
|
|
|
|
(viii)
|
3.875% Senior Notes due November 1, 2023 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.2 to YUM's Report on Form 8-K filed October 31, 2013.
|
|
|
|
|
|
|
|
|
(ix)
|
5.350% Senior Notes due November 1, 2043 issued under the foregoing May 1, 1998 indenture, which notes are incorporated by reference from Exhibit 4.3 to YUM's Report on Form 8-K filed October 31, 2013.
|
10.1 +
|
|
Master Distribution Agreement between Unified Foodservice Purchasing Co-op, LLC, for and on behalf of itself as well as the Participants, as defined therein (including certain subsidiaries of Yum! Brands, Inc.) and McLane Foodservice, Inc., effective as of January 1, 2011 and Participant Distribution Joinder Agreement between Unified Foodservice Purchasing Co-op, LLC, McLane Foodservice, Inc., and certain subsidiaries of Yum! Brands, Inc., which are incorporated herein by reference from Exhibit 10.1 to YUM's Quarterly Report on Form 10-Q for the quarter ended September 4, 2010.
|
|||
|
|
|
|||
10.2
|
|
Credit Agreement, dated March 22, 2012 among YUM, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as Lead Arrangers and Bookrunners and HSBC Bank USA, National Association, US Bank, National Association and Fifth Third Bank, as Documentation Agents, which is incorporated herein by reference from Exhibit 10.26 to YUM's Quarterly Report on Form 10-Q for quarter ended March 24, 2012.
|
|||
|
|
|
|||
10.3†
|
|
YUM Director Deferred Compensation Plan, as effective October 7, 1997, which is incorporated herein by reference from Exhibit 10.7 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 1997.
|
|||
|
|
|
|||
10.3.1†
|
|
YUM Director Deferred Compensation Plan, Plan Document for the 409A Program, as effective January 1, 2005, and as Amended through November 14, 2008, which is incorporated by reference from Exhibit 10.7.1 to YUM's Quarterly Report on Form 10-Q for the quarter ended June 13, 2009.
|
|||
|
|
|
|||
10.4†
|
|
YUM 1997 Long Term Incentive Plan, as effective October 7, 1997, which is incorporated herein by reference from Exhibit 10.8 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 1997.
|
|||
|
|
|
|||
10.5†
|
|
YUM Executive Incentive Compensation Plan, as effective May 20, 2004, and as Amended through the Second Amendment, as effective May 21, 2009, which is incorporated herein by reference from Exhibit A of YUM's Definitive Proxy Statement on Form DEF 14A for the Annual Meeting of Shareholders held on May 21, 2009.
|
|||
|
|
|
|||
10.6†
|
|
YUM Executive Income Deferral Program, as effective October 7, 1997, and as amended through May 16, 2002, which is incorporated herein by reference from Exhibit 10.10 to YUM's Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
|
|||
|
|
|
|||
10.6.1†
|
|
YUM! Brands Executive Income Deferral Program, Plan Document for the 409A Program, as effective January 1, 2005, and as Amended through June 30, 2009, which is incorporated by reference from Exhibit 10.10.1 to YUM's Quarterly Report on Form 10-Q for the quarter ended June 13, 2009.
|
|||
|
|
|
|||
10.7†
|
|
YUM! Brands Pension Equalization Plan, Plan Document for the Pre-409A Program, as effective January 1, 2005, and as Amended through December 31, 2010, which is incorporated by reference from Exhibit 10.7 to Yum's Quarterly Report on Form 10-Q for the quarter ended March 19, 2011.
|
|||
|
|
|
|||
10.7.1†
|
|
YUM! Brands, Inc. Pension Equalization Plan, Plan Document for the 409A Program, as effective January 1, 2005, and as Amended through December 30, 2008, which is incorporated by reference from Exhibit 10.13.1 to YUM's Quarterly Report on Form 10-Q for the quarter ended June 13, 2009.
|
|||
|
|
|
|
||
10.7.2†
|
|
YUM! Brands Pension Equalization Plan Amendment, as effective January 1, 2012, which is incorporated by reference from Exhibit 10.7.2 to Yum’s Quarterly Report on Form 10-Q for the quarter ended March 23, 2013.
|
|||
|
|
|
|||
10.7.3†
|
|
YUM! Brands Pension Equalization Plan Amendment, as effective January 1, 2013, which is incorporated by reference from Exhibit 10.7.3 to Yum’s Quarterly Report on Form 10-Q for the quarter ended March 23, 2013.
|
|||
|
|
|
|||
10.8†
|
|
Form of Directors' Indemnification Agreement, which is incorporated herein by reference from Exhibit 10.17 to YUM's Annual Report on Form 10-K for the fiscal year ended December 27, 1997.
|
10.9†
|
|
Form of YUM! Brands, Inc. Change in Control Severance Agreement, which is incorporated herein by reference from Exhibit 10.1 to Yum’s Report on Form 8-K filed on March 21, 2013.
|
|||
|
|
|
|
||
10.10†
|
|
YUM Long Term Incentive Plan, as Amended through the Fourth Amendment, as effective November 21, 2008, which is incorporated by reference from Exhibit 10.18 to YUM's Quarterly Report on Form 10-Q for the quarter ended June 13, 2009.
|
|||
|
|
|
|
||
10.11
|
|
Second Amended and Restated YUM Purchasing Co-op Agreement, dated as of January 1, 2012, between YUM and the Unified Foodservice Purchasing Co-op, LLC, which is incorporated herein by reference from Exhibit 10.11 to YUM’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
|
|||
|
|
|
|
||
10.12†
|
|
YUM Restaurant General Manager Stock Option Plan, as effective April 1, 1999, and as amended through June 23, 2003, which is incorporated herein by reference from Exhibit 10.22 to YUM's Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
|
|||
|
|
|
|
||
10.13†
|
|
YUM SharePower Plan, as effective October 7, 1997, and as amended through June 23, 2003, which is incorporated herein by reference from Exhibit 10.23 to YUM's Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
|
|||
|
|
|
|
||
10.14†
|
|
Form of YUM Director Stock Option Award Agreement, which is incorporated herein by reference from Exhibit 10.25 to YUM's Quarterly Report on Form 10-Q for the quarter ended September 4, 2004.
|
|||
|
|
|
|
||
10.15†
|
|
Form of YUM 1999 Long Term Incentive Plan Award Agreement, which is incorporated herein by reference from Exhibit 10.26 to YUM's Quarterly Report on Form 10-Q for the quarter ended September 4, 2004.
|
|||
|
|
|
|
||
10.15.1†
|
|
Form of YUM 1999 Long Term Incentive Plan Award Agreement (2013) (Stock Options), as incorporated by reference from Exhibit 10.15.1 to YUM’s Quarterly Report on Form 10-Q for the quarter ended March 23, 2013.
|
|||
|
|
|
|||
10.15.2†
|
|
Form of YUM 1999 Long Term Incentive Plan Award Agreement (2015) (Stock Options), as filed herewith.
|
|||
|
|
|
|||
10.16†
|
|
YUM! Brands, Inc. International Retirement Plan, as in effect January 1, 2005, which is incorporated herein by reference from Exhibit 10.27 to YUM's Annual Report on Form 10-K for the fiscal year ended December 25, 2004.
|
|||
|
|
|
|
||
10.17†
|
|
Letter of Understanding, dated July 13, 2004, and as amended on May 18, 2011, by and between the Company and Samuel Su, which is incorporated herein by reference from Exhibit 10.28 to YUM's Annual Report on Form 10-K for the fiscal year ended December 25, 2004, and from Item 5.02 of Form 8-K on May 24, 2011.
|
|||
|
|
|
|
||
10.18†
|
|
Form of 1999 Long Term Incentive Plan Award Agreement (Stock Appreciation Rights) which is incorporated by reference from Exhibit 99.1 to YUM's Report on Form 8-K as filed on January 30, 2006.
|
|||
|
|
|
|
|
|
10.18.1†
|
|
Form of YUM 1999 Long Term Incentive Plan Award Agreement (2013) (Stock Appreciation Rights), which is incorporated by reference from Exhibit 10.18.1 to YUM’s Quarterly Report on Form 10-Q for the quarter ended March 23, 2013.
|
|||
|
|
||||
10.18.2†
|
|
Form of YUM 1999 Long Term Incentive Plan Award Agreement (2015) (Stock Appreciation Rights), as filed herewith.
|
|||
|
|
|
|
|
|
10.20†
|
|
YUM! Brands Leadership Retirement Plan, as in effect January 1, 2005, which is incorporated herein by reference from Exhibit 10.32 to YUM's Quarterly Report on Form 10-Q for the quarter ended March 24, 2007.
|
10.20.1†
|
|
YUM! Brands Leadership Retirement Plan, Plan Document for the 409A Program, as effective January 1, 2005, and as Amended through December, 2009, which is incorporated by reference from Exhibit 10.21.1 to YUM's Annual Report on Form 10-K for the fiscal year ended December 26, 2009.
|
||||
|
|
|
||||
10.21†
|
|
1999 Long Term Incentive Plan Award (Restricted Stock Unit Agreement) by and between the Company and David C. Novak, dated as of January 24, 2008, which is incorporated herein by reference from Exhibit 10.33 to YUM's Annual Report on Form 10-K for the fiscal year ended December 29, 2007.
|
||||
|
|
|
||||
10.22†
|
|
YUM! Performance Share Plan, as effective January 1, 2009, which is incorporated by reference from Exhibit 10.24 to YUM's Annual Report on Form 10-K for the fiscal year ended December 26, 2009.
|
||||
|
|
|
||||
10.23†
|
|
YUM! Brands Third Country National Retirement Plan, as effective January 1, 2009, which is incorporated by reference from Exhibit 10.25 to YUM's Annual Report on Form 10-K for the fiscal year ended December 26, 2009.
|
||||
|
|
|
||||
10.24†
|
|
2010 YUM! Brands Supplemental Long Term Disability Coverage Summary, as effective January 1, 2010, which is incorporated by reference from Exhibit 10.26 to YUM's Annual Report on Form 10-K for the fiscal year ended December 26, 2009.
|
||||
|
|
|
||||
10.25†
|
|
1999 Long Term Incentive Plan Award (Restricted Stock Unit Agreement) by and between the Company and Jing-Shyh S. Su, dated as of May 20, 2010, which is incorporated by reference from Exhibit 10.27 to YUM's Annual Report on Form 10-K for the fiscal year ended December 25, 2010.
|
||||
|
|
|
||||
10.27†
|
|
1999 Long Term Incentive Plan Award (Stock Appreciation Rights) by and between the Company and David C. Novak, dated as of February 6, 2015, as filed herewith.
|
||||
|
|
|
||||
10.28†
|
|
YUM! Brands, Inc. Compensation Recovery Policy, Amended and Restated January 1, 2015, as filed herewith.
|
||||
|
|
|
||||
12.1
|
|
Computation of ratio of earnings to fixed charges.
|
||||
|
|
|
||||
21.1
|
|
Active Subsidiaries of YUM.
|
||||
|
|
|
||||
23.1
|
|
Consent of KPMG LLP.
|
||||
|
|
|
|
|||
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||||
|
|
|
||||
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||||
|
|
|
||||
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||||
|
|
|
||||
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||||
|
|
|
||||
101.INS
|
|
XBRL Instance Document
|
||||
|
|
|
||||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
||||
|
|
|
||||
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||||
|
|
|
||||
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
||||
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
||||
|
|
|
||||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||||
|
|
|
||||
+
|
Confidential treatment has been granted for certain portions which are omitted in the copy of the exhibit electronically filed with the SEC. The omitted information has been filed separately with the SEC pursuant to our application for confidential treatment.
|
|||||
|
|
|
||||
†
|
Indicates a management contract or compensatory plan.
|
(a)
|
the Plan is established voluntarily by YUM! and is discretionary in nature;
|
(b)
|
all decisions with respect to future stock appreciation right grants, if any, will be at the sole discretion of YUM!;
|
(c)
|
the Participant is voluntarily participating in the Plan;
|
(d)
|
the YUM! Stock Appreciation Right and any shares of Stock (or cash) acquired under the Plan are not part of normal or expected compensation or salary;
|
(e)
|
the YUM! Stock Appreciation Rights grant and the Participant’s participation in the Plan shall not be interpreted to form an employment contract or relationship with YUM! or the Employer or any Subsidiary or affiliate of YUM!;
|
(f)
|
the future value of the underlying shares is unknown and cannot be predicted with certainty;
|
(g)
|
if the underlying shares do not increase in value, the YUM! Stock Appreciation Right will have no value;
|
(h)
|
in the event of termination of Participant’s employment with the Company (whether or not in breach of local labor laws), the Participant’s right to receive the YUM! Stock Appreciation Right and vest in the YUM! Stock Appreciation Right under the Plan, if any, will terminate effective as of the date that Participant is no longer actively employed with the Company (subject to the terms and conditions of this Agreement) and will not be extended by any notice period mandated under local law (
e.g
., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment with the Company (whether or not in breach of local labor laws), the Participant’s right to exercise the YUM! Stock Appreciation Right after termination of employment, if any, will be measured by the Participant’s last day of active employment with the Company (subject to the terms and conditions of this Agreement) and will not be extended by any notice period mandated under local law. The Committee shall have the exclusive discretion to determine when the Participant is no longer actively employed with the Company for purposes of his or her YUM! Stock Appreciation Right grant;
|
(i)
|
for Participants who reside outside the U.S., the following additional provisions shall apply:
|
(i)
|
the YUM! Stock Appreciation Right and any shares (or cash) acquired under the Plan are not intended to replace any pension rights or compensation;
|
(ii)
|
the YUM! Stock Appreciation Right and the shares (or cash) acquired under the Plan are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to YUM! or to the Employer and are outside the scope of Participant’s employment contract, if any; such items shall not be included in or part of any calculation of any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for YUM! or the Employer; and
|
(iii)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the YUM! Stock Appreciation Rights resulting from termination of the Participant’s employment by YUM! or the Employer (whether or not in breach of local labor laws) and in consideration of the grant of the YUM! Stock Appreciation Right to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company, waives his or her ability, if any, to bring any such claim and releases the Company from any such claim if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims.
|
(i)
|
McDonald’s Corporation
|
(ii)
|
Wendy’s Corporation
|
(iii)
|
Burger King Corporation
|
(iv)
|
Popeye’s Louisiana Kitchen, Inc. (formerly, AFC Enterprises, Inc.)
|
(v)
|
Subway Restaurants
|
(vi)
|
Domino’s Pizza
|
(vii)
|
Little Caesar’s Pizza
|
By:
|
/s/ Anne P. Byerlein
|
|
Anne P. Byerlein
|
|
YUM! Brands, Inc., Chief People Officer
|
(a)
|
the Committee shall recover or cancel any such Performance Awards which were awarded as a result of achieving performance targets that could not have been met under the restated results, provided that the restatement occurs prior to the end of the three year period following the performance period applicable to such Performance Awards; and.
|
(b)
|
any exercise or payment under or with respect to any Award of an Executive Officer occurring within 12 months after the restated year (or other restated period) shall be rescinded by the Committee.
|
•
|
Any cancellations, rescissions, suspensions, withholdings, limitations or restrictions on Awards or recoveries shall be permitted or required only to the extent permitted under applicable law.
|
•
|
The Committee may determine or reduce the amount of any recovery or repayment based on such factors as the Committee determines in its sole discretion to be relevant.
|
•
|
The provisions of this Policy shall not apply to any reductions in Awards made after a Change in Control (as defined in the Incentive Plan) to the extent that Awards were granted before a Change in Control.
|
(a)
|
the Plan is established voluntarily by YUM! and is discretionary in nature;
|
(b)
|
all decisions with respect to future option grants, if any, will be at the sole discretion of YUM!;
|
(c)
|
the Option and any shares of Stock (or cash) acquired under the Plan are not part of normal or expected compensation or salary;
|
(d)
|
the Option grant and the Optionee’s participation in the Plan shall not be interpreted to form an employment contract or relationship with YUM! or the Employer or any Subsidiary or affiliate of YUM!;
|
(e)
|
the future value of the underlying shares is unknown and cannot be predicted with certainty;
|
(f)
|
if the underlying shares do not increase in value, the Option will have no value;
|
(g)
|
in the event of termination of Optionee’s employment with the Company (whether or not in breach of local labor laws), the Optionee’s right to receive the Option and vest in the Option under the Plan, if any, will terminate effective as of the date that Optionee is no longer actively employed with the Company (subject to the terms and conditions of the Agreement) and will not be extended by any notice period mandated under local law (
e.g
., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment (whether or not in breach of local labor laws), the Optionee’s right to exercise the Option after termination of employment, if any, will be measured by the last day of Optionee’s active employment and will not be extended by any notice period mandated under local law. The Committee shall have the exclusive discretion to determine when the Optionee is no longer actively employed with the Company for purposes of his or her Option grant;
|
(h)
|
for Optionees who reside outside the U.S., the following additional provisions shall apply:
|
(i)
|
the Option and any shares (or cash) acquired under the Plan are not intended to replace any pension rights or compensation;
|
(ii)
|
the Option and the shares (or cash) acquired under the Plan are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to YUM! or to the Employer and are outside the scope of the Optionee’s employment contract, if any; such items shall not be included in or part of any calculation of any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for YUM! or the Employer; and
|
(iii)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of the Optionee’s employment by YUM! or the Employer (whether or not in breach of local labor laws) and in consideration of the grant of the Option to which the Optionee is otherwise not entitled, the Optionee irrevocably agrees never to institute any claim against the Company, waives his or her ability, if any, to bring any such claim and releases the Company from any such claim if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Optionee shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims.
|
By:
|
/s/ Anne P. Byerlein
|
|
Anne P. Byerlein
|
|
YUM! Brands, Inc., Chief People Officer
|
(a)
|
the Plan is established voluntarily by YUM! and is discretionary in nature;
|
(b)
|
all decisions with respect to future stock appreciation right grants, if any, will be at the sole discretion of YUM!;
|
(c)
|
the Participant is voluntarily participating in the Plan;
|
(d)
|
the YUM! Stock Appreciation Right and any shares of Stock (or cash) acquired under the Plan are not part of normal or expected compensation or salary;
|
(e)
|
the YUM! Stock Appreciation Rights grant and the Participant’s participation in the Plan shall not be interpreted to form an employment contract or relationship with YUM! or the Employer or any Subsidiary or affiliate of YUM!;
|
(f)
|
the future value of the underlying shares is unknown and cannot be predicted with certainty;
|
(g)
|
if the underlying shares do not increase in value, the YUM! Stock Appreciation Right will have no value;
|
(h)
|
in the event of termination of Participant’s employment with the Company (whether or not in breach of local labor laws), the Participant’s right to receive the YUM! Stock Appreciation Right and vest in the YUM! Stock Appreciation Right under the Plan, if any, will terminate effective as of the date that Participant is no longer actively employed with the Company (subject to the terms and conditions of this Agreement) and will not be extended by any notice period mandated under local law (
e.g
., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment with the Company (whether or not in breach of local labor laws), the Participant’s right to exercise the YUM! Stock Appreciation Right after termination of employment, if any, will be measured by the Participant’s last day of active employment with the Company (subject to the terms and conditions of this Agreement) and will not be extended by any notice period mandated under local law. The Committee shall have the exclusive discretion to determine when the Participant is no longer actively employed with the Company for purposes of his or her YUM! Stock Appreciation Right grant;
|
(i)
|
for Participants who reside outside the U.S., the following additional provisions shall apply:
|
(i)
|
the YUM! Stock Appreciation Right and any shares (or cash) acquired under the Plan are not intended to replace any pension rights or compensation;
|
(ii)
|
the YUM! Stock Appreciation Right and the shares (or cash) acquired under the Plan are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to YUM! or to the Employer and are outside the scope of Participant’s employment contract, if any; such items shall not be included in or part of any calculation of any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for YUM! or the Employer; and
|
(iii)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the YUM! Stock Appreciation Rights resulting from termination of the Participant’s employment by YUM! or the Employer (whether or not in breach of local labor laws) and in consideration of the grant of the YUM! Stock Appreciation Right to which the Participant is otherwise not entitled, the Participant irrevocably agrees never to institute any claim against the Company, waives his or her ability, if any, to bring any such claim and releases the Company from any such claim if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims.
|
By:
|
/s/ Anne P. Byerlein
|
|
Anne P. Byerlein
|
|
YUM! Brands, Inc., Chief People Officer
|
Exhibit 12.1
YUM! Brands, Inc.
Ratio of Earnings to Fixed Charges Years Ended 2014 - 2010
(In millions except ratio amounts)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
52 Weeks
|
|
53 Weeks
|
|
52 Weeks
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pretax income from continuing operations before cumulative effect of accounting changes
|
|
$
|
1,427
|
|
|
$
|
1,551
|
|
|
$
|
2,145
|
|
|
$
|
1,659
|
|
|
$
|
1,594
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
50% or less owned Affiliates' interests, net
|
|
(2
|
)
|
|
17
|
|
|
(6
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
|
|
159
|
|
|
279
|
|
|
181
|
|
|
203
|
|
|
212
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest portion of net rent expense
|
|
219
|
|
|
359
|
|
|
341
|
|
|
314
|
|
|
298
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings available for fixed charges
|
|
$
|
1,803
|
|
|
$
|
2,206
|
|
|
$
|
2,661
|
|
|
$
|
2,168
|
|
|
$
|
2,097
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest Expense
|
|
$
|
161
|
|
|
$
|
281
|
|
|
$
|
182
|
|
|
$
|
204
|
|
|
$
|
213
|
|
Interest portion of net rent expense
|
|
219
|
|
|
359
|
|
|
341
|
|
|
314
|
|
|
298
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges
|
|
$
|
380
|
|
|
$
|
640
|
|
|
$
|
523
|
|
|
$
|
518
|
|
|
$
|
511
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
4.74
|
|
|
3.45
|
|
|
5.09
|
|
|
4.19
|
|
|
4.10
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 21.1
|
|
|
||
SUBSIDIARIES OF YUM! BRANDS, INC.
|
||
|
||
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
A.C.N. 003 190 163 Pty. Limited
|
Australia
|
|
A.C.N. 003 190 172 Pty. Limited
|
Australia
|
|
A.C.N. 003 273 854 Pty. Limited
|
Australia
|
|
A.C.N. 054 055 917 Pty. Ltd.
|
Australia
|
|
A.C.N. 085 239 961 Pty. Ltd. (SA1)
|
Australia
|
|
A.C.N. 085 239 998 Pty. Ltd. (SA2)
|
Australia
|
|
ABR Insurance Company
|
Vermont
|
|
Ashton Fried Chicken Pty. Limited
|
Australia
|
|
Atto Primo (Shanghai) Co., Ltd.
|
China
|
|
Baotou Little Sheep Jingchen Catering Co., Ltd
|
China
|
|
Baotou Little Sheep Shenhua Catering Company Limited
|
China
|
|
Bazhou Jianxin Little Sheep Catering Co, Ltd.
|
China
|
|
Bazhou Little Sheep Catering Co, Ltd.
|
China
|
|
Beijing KFC Co., Ltd.
|
China
|
|
Beijing Pizza Hut Co., Ltd.
|
China
|
|
Beijing Yizhuang Little Sheep Catering Co., Ltd.
|
China
|
|
Beijing Zhichun Road Little Sheep Catering Co., Ltd.
|
China
|
|
BengBu NanShan Little Sheep Catering Co., Ltd
|
China
|
|
Binzhou Little Sheep Catering Co., Ltd
|
China
|
|
Changsha Fuwang Catering Management Co., Ltd
|
China
|
|
Changsha KFC Co., Ltd.
|
China
|
|
ChangSha Little Sheep Catering Administration Co., Ltd
|
China
|
|
Changsha Yongao Catering Co. Ltd.
|
China
|
|
China XiaoFeiYang Catering Chain Co., Ltd.
|
British Virgin Islands
|
|
Chongqing KFC Co., Ltd.
|
China
|
|
Cyprus Caramel Restaurants Limited
|
Cyprus
|
|
Dalian KFC Co., Ltd.
|
China
|
|
Dezhou Little Sheep Catering Co., Ltd.
|
China
|
|
Dongguan Humen Little Sheep Catering Co. Ltd.
|
China
|
|
Dongguan KFC Co., Ltd.
|
China
|
|
Finger Lickin' Chicken Limited
|
United Kingdom
|
|
Foshan Little Sheep Catering Co., Ltd
|
China
|
|
Foshan Mengjie Catering Company Limited
|
China
|
|
Fuzhou Cangshan Little Sheep Catering Co., Ltd.
|
China
|
|
Fuzhou Fuxing Little Sheep Catering Company Limited
|
China
|
|
Fuzhou Gulou Hualin Little Sheep Catering Co., Ltd.
|
China
|
|
Fuzhou Gulou Little Sheep Catering Company Limited
|
China
|
|
Fuzhou Taijiang Little Sheep Catering Co., Ltd.
|
China
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
Gansu Hongfu Little Sheep Catering Management Company Limited
|
China
|
|
Gansu Hongxi Little Sheep Catering Co., Ltd.
|
China
|
|
Gansu Hongxiang Little Sheep Catering Co., Ltd.
|
China
|
|
GanSu Little Sheep Catering Co., Ltd
|
China
|
|
GCTB, LLC f/k/a GCTB, Inc.
|
Virginia
|
|
Gloucester Properties Pty. Ltd.
|
Australia
|
|
Guangzhou Little Sheep Corporation Consulting Management Co., Ltd.
|
China
|
|
Guangzhou Little Sheep Trading Company Limited
|
China
|
|
Guangzhou Xingwang Catering Co., Ltd. f/k/a Guangzhou Hajie Catering Co., Ltd
|
China
|
|
Guangzhou Yingfeng Yijing Catering Co., Ltd.
|
China
|
|
Guangzhou Yuansheng Catering Co., Ltd
|
China
|
|
Hangzhou KFC Co., Ltd.
|
China
|
|
Hangzhou YongAo Catering Co. Ltd.
|
China
|
|
Hohhot Little Sheep Catering Co., Ltd
|
China
|
|
Huan Sheng Advertising (Shanghai) Company Ltd.
|
China
|
|
Huizhou Yanfu Catering Management Co., Ltd
|
China
|
|
Inner Mongolia Little Sheep Catering Chain Company Limited
|
China
|
|
Inner Mongolia Little Sheep Seasoning Company Limited
|
China
|
|
Inventure Restaurantes Ltda.
|
Brazil
|
|
Jiangmen Pengjiang Little Sheep Catering Co., Ltd
|
China
|
|
Jiaozuo Little Sheep Catering Co., Ltd.
|
China
|
|
Jinan Zhaofei Little Sheep Catering Co., Ltd
|
China
|
|
Jinjiang Little Sheep Catering Co., Ltd
|
China
|
|
Kentucky Fried Chicken (Germany) Restaurant Holdings GmbH
|
Germany
|
|
Kentucky Fried Chicken (Great Britain) Limited
|
United Kingdom
|
|
Kentucky Fried Chicken (Great Britain) Services Limited
|
United Kingdom
|
|
Kentucky Fried Chicken Canada Company
|
Canada
|
|
Kentucky Fried Chicken de Mexico, S. de R.L. de C.V.
|
Mexico
|
|
Kentucky Fried Chicken Global B.V.
|
Netherlands
|
|
Kentucky Fried Chicken International Holdings, Inc.
|
Delaware
|
|
Kentucky Fried Chicken Pty. Ltd.
|
Australia
|
|
KFC Advertising, Ltd.
|
United Kingdom
|
|
KFC Asia LLC
|
Delaware
|
|
KFC Australia Holdings Limited f/k/a Yum! Australia Holdings Limited
|
Cayman Islands
|
|
KFC Brasil Publicidade e Propaganda Ltda
|
Brazil
|
|
KFC Chamnord SAS
|
France
|
|
KFC Clamart et Coignieres SAS f/k/a Arviso
|
France
|
|
KFC Corporation
|
Delaware
|
|
KFC Europe S.à r.l.
|
Luxembourg
|
|
KFC France SAS
|
France
|
|
KFC Global Holdings, Inc.
|
Delaware
|
|
KFC Holding SAS
|
France
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
KFC Holding Co.
|
Delaware
|
|
KFC Holdings B.V.
|
Netherlands
|
|
KFC Intermediate Holdings S.à r.l.
|
Luxembourg
|
|
KFC International Finance Company S.à r.l.
|
Luxembourg
|
|
KFC International Holdings I S.à r.l. f/k/a Yum! Finance Holdings ll Sarl f/k/a Stealth Investments Sarl
|
Luxembourg
|
|
KFC International Holdings II S.à r.l.
|
Luxembourg
|
|
KFC Italy S.r.l.
|
Italy
|
|
KFC Menapak LLC
|
Delaware
|
|
KFC MENAPAK S.à r.l.
|
Luxembourg
|
|
KFC Mexico B.V.
|
Netherlands
|
|
KFC Mexico Holdings LLC
|
Delaware
|
|
KFC North America S.à r.l.
|
Luxembourg
|
|
KFC Pacific Holdings Ltd f/k/a THC II Limited
|
Malta
|
|
KFC Pacific LLC
|
Delaware
|
|
KFC Restaurants Asia Pte., Ltd.
|
Singapore
|
|
KFC Restaurants Spain S.L.
|
Spain
|
|
KFC THC V Ltd f/k/a THC V Limited
|
Malta
|
|
KFC YFI Holdco S.à r.l.
|
Luxembourg
|
|
KFC Yum! Franchise I LP
|
Canada
|
|
KFC Yum! Franchise III f/k/a Yum! Franchise III
|
Australia
|
|
Kunming Jinding Catering Co., Ltd
|
China
|
|
Kunming KFC Co., Ltd.
|
China
|
|
Lanzhou KFC Co., Ltd.
|
China
|
|
Little Sheep Catering Company Limited, Yongding Road, Beijing City
|
China
|
|
Little Sheep Group Limited
|
Cayman Islands
|
|
Little Sheep Hong Kong Company Limited
|
Hong Kong
|
|
Little Sheep Hong Kong Holdings Company Limited
|
Hong Kong
|
|
Little Sheep Macau - Restaurant Chain of Stores Limited
|
Macau
|
|
Little Sheep MongKok Company Limited
|
Hong Kong
|
|
Little Sheep Tsim Sha Tsui Company Limited
|
Hong Kong
|
|
Little Sheep Tsuen Wan Company Limited
|
Hong Kong
|
|
Little Sheep Yuenlang Co., Ltd
|
China
|
|
Liuzhou Gubu Little Sheep Catering Co., Ltd.
|
China
|
|
LiuZhou Little Sheep Catering Co., Ltd
|
China
|
|
Multibranding Pty. Ltd.
|
Australia
|
|
Nanchang KFC Co., Ltd.
|
China
|
|
Nanchang Taoyuan Little Sheep Catering Management Co, Ltd.
|
China
|
|
Nanjing Huixing Little Sheep Catering Co., Ltd.
|
China
|
|
Nanjing KFC Co., Ltd.
|
China
|
|
Nanjing Lucheng Little Sheep Catering Business Management Co. Ltd.
|
China
|
|
Nanjing Mengle Little Sheep Catering Company Limited
|
China
|
|
Nanjing MengYuan Little Sheep Catering Co., Ltd
|
China
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
NanJing XingMeng Little Sheep Catering Co., Ltd
|
China
|
|
Nanning KFC Co., Ltd.
|
China
|
|
Nanning Little Sheep Catering Chain Company Limited
|
China
|
|
Nanning Ruyun Catering Co., Ltd.
|
China
|
|
Newcastle Fried Chicken Pty. Ltd.
|
Australia
|
|
NingBo JiangDong ShuGuang Little Sheep Catering Co., Ltd
|
China
|
|
Ningbo Little Sheep Catering Company Limited
|
China
|
|
Norfolk Fast Foods Limited
|
United Kingdom
|
|
Northside Fried Chicken Pty Limited
|
Australia
|
|
Novo BL SAS
|
France
|
|
Novo Re IMMO SAS
|
France
|
|
PH Global Holdings, Inc.
|
Delaware
|
|
PH Asia LLC
|
Delaware
|
|
PH Canada Company
|
Canada
|
|
PH Digico LLC
|
Delaware
|
|
PH Europe LLC f/k/a PH US LLC
|
Delaware
|
|
PH Europe S.à r.l.
|
Luxembourg
|
|
PH Intermediate Holdings S.à r.l.
|
Luxembourg
|
|
PH International Finance Company S.à r.l.
|
Luxembourg
|
|
PH International Holdings I S.à r.l. f/k/a Yum! Finance Holdings lll Sarl f/k/a ITRAS Holdings Sarl
|
Luxembourg
|
|
PH International Holdings II S.à r.l.
|
Luxembourg
|
|
PH Mexico B.V.
|
Netherlands
|
|
PH Mexico S.à r.l.
|
Luxembourg
|
|
PH North America S.à r.l.
|
Luxembourg
|
|
PH THC V Ltd
|
Malta
|
|
PH YFI Holdco S.à r.l.
|
Luxembourg
|
|
PH Yum! Franchise I LP
|
Canada
|
|
PH Yum! Franchise III
|
Australia
|
|
Pizza Hut (Pty) Ltd f/k/a Friedshelf 1503 Proprietary Limited
|
South Africa
|
|
Pizza Hut Australia Pty Limited f/k/a ACN 054 121 416 Pty. Ltd.
|
Australia
|
|
Pizza Hut Del Distrito, S. de R.L. de C.V.
|
Mexico
|
|
Pizza Hut Delivery Germany GmbH
|
Germany
|
|
Pizza Hut HSR Advertising Limited
|
United Kingdom
|
|
Pizza Hut International, LLC
|
Delaware
|
|
Pizza Hut Korea Limited f/k/a Pizza Hut Korea Co., Ltd.
|
Korea, Republic of
|
|
Pizza Hut MENAPAK S.à r.l.
|
Luxembourg
|
|
Pizza Hut of America, LLC f/k/a Pizza Hut of America, Inc.
|
Delaware
|
|
Pizza Hut Pacific Holdings Ltd.
|
Malta
|
|
Pizza Hut Restaurants Asia Pte., Ltd.
|
Singapore
|
|
Pizza Hut, Inc.
|
California
|
|
Qianan Fenghui Little Sheep Catering Co., Ltd.
|
China
|
|
Qingdao KFC Co., Ltd.
|
China
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
Qinghe Little Sheep Catering Co.. Ltd.
|
China
|
|
Qinhuangdao Chenxin Little Sheep Catering Co., Ltd.
|
China
|
|
Restaurant Concepts LLC
|
Delaware
|
|
Restaurant Holdings Limited
|
United Kingdom
|
|
Shandong Little Sheep Hotel Management Company Limited
|
China
|
|
Shanghai Changning Little Sheep Catering Company Limited
|
China
|
|
Shanghai ChengShan Little Sheep Catering Co, Ltd
|
China
|
|
Shanghai Fengnan Little Sheep Catering Co., Ltd
|
China
|
|
Shanghai Gumei Little Sheep Catering Co., Ltd
|
China
|
|
Shanghai Huijin Little Sheep Catering Co., Ltd
|
China
|
|
Shanghai Jingan Little Sheep Catering Management Company Limited
|
China
|
|
Shanghai KFC Co., Ltd.
|
China
|
|
Shanghai Little Sheep Catering Co., Ltd.
|
China
|
|
Shanghai Little Sheep Catering Company Limited
|
China
|
|
Shanghai Lujiabang Little Sheep Catering Company Limited
|
China
|
|
Shanghai Luyuan Little Sheep Catering Company Limited
|
China
|
|
Shanghai Pengpu Little Sheep Catering Company Limited
|
China
|
|
Shanghai Pizza Hut Co., Ltd.
|
China
|
|
Shanghai Pudong Little Sheep Catering Company Limited
|
China
|
|
Shanghai Putuo Little Sheep Catering Company Limited
|
China
|
|
Shanghai Qibao Little Sheep Catering Company Limited
|
China
|
|
Shanghai Qingpu Little Sheep Catering Management Company Limited
|
China
|
|
ShangHai WangYuan Little Sheep Catering Co., Ltd
|
China
|
|
Shanghai Yangpu Little Sheep Catering Company Limited
|
China
|
|
Shanghai Zhenhua Little Sheep Catering Co., Ltd
|
China
|
|
Shantou KFC Co., Ltd.
|
China
|
|
ShenYang MengXing Little Sheep Catering Co., Ltd
|
China
|
|
Shenyang Minsheng Little Sheep Catering Company Limited
|
China
|
|
Shenyang Wangda Little Sheep Catering Co., Ltd.
|
China
|
|
Shenyang Xiangjiang Little Sheep Catering Company Limited
|
China
|
|
ShenYang YongAo Little Sheep Catering Co., Ltd
|
China
|
|
Shenzhen Little Sheep Catering Chain Company Limited
|
China
|
|
Shenzhen Little Sheep Enterprise Company Limited
|
China
|
|
Shenzhen Tianjiao Catering Co., Ltd.
|
China
|
|
Shenzhen Xintu Catering Co., Ltd.
|
China
|
|
Shenzheng Huacai Catering Co., Ltd.
|
China
|
|
ShiShi Little Sheep Catering Co., Ltd
|
China
|
|
Southern Fast Foods Limited f/k/a Milne Fast Foods Limited
|
United Kingdom
|
|
Suffolk Fast Foods Limited
|
United Kingdom
|
|
Sunrise Investments, Co., Ltd.
|
British Virgin Islands
|
|
Suzhou KFC Co., Ltd.
|
China
|
|
Taco Bell Corp
|
California
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
Taco Bell of America, LLC f/k/a Taco Bell of America, Inc.
|
Delaware
|
|
Taco Bell Restaurants Asia Pte., Ltd.
|
Singapore
|
|
TaiYuan KFC Co., Ltd.
|
China
|
|
Tangshan Little Sheep Catering Co., Ltd.
|
China
|
|
TB Asia LLC
|
Delaware
|
|
TB Canada Company
|
Canada
|
|
TB Global Holdings, Inc.
|
Delaware
|
|
TB Intermediate Holdings S.à r.l.
|
Luxembourg
|
|
TB International Finance Company S.à r.l.
|
Luxembourg
|
|
TB International Holdings I S.à r.l.
|
Luxembourg
|
|
TB International Holdings II S.à r.l.
|
Luxembourg
|
|
TB North America S.à r.l.
|
Luxembourg
|
|
TB YFI Holdco S.à r.l.
|
Luxembourg
|
|
TB Yum! Franchise I LP
|
Canada
|
|
THC I Limited
|
Malta
|
|
THC III Limited
|
Malta
|
|
Tianjin Fanyang Little Sheep Catering Co., Ltd.
|
China
|
|
Tianjin Fuan Little Sheep Catering Co., Ltd.
|
China
|
|
Tianjin KFC Co., Ltd.
|
China
|
|
Tianshui Little Sheep Catering Company Limited
|
China
|
|
Tricon Global Restaurants, Inc.
|
North Carolina
|
|
Turkent Gida Ve Turizm Sanayi Ve Ticaret A.S.
|
Turkey
|
|
U.S. Taco Co., LLC
|
New York
|
|
U.S. Taco Holding Co., LLC
|
New York
|
|
Valleythorn Limited
|
United Kingdom
|
|
Verailles Resto S.A.S.
|
France
|
|
Wandle Investments Ltd.
|
Hong Kong
|
|
Wenan Little Sheep Catering Co., Ltd.
|
China
|
|
Wuhan Mengwang Catering Co., Ltd
|
China
|
|
WuHan MengXiang Little Sheep Catering Co., Ltd
|
China
|
|
WuHan YongAo Little Sheep Catering Co., Ltd
|
China
|
|
Wuxi KFC Co., Ltd.
|
China
|
|
Xiamen KFC Co., Ltd.
|
China
|
|
Xiamen Lianqian Little Sheep Catering Co.,Ltd
|
China
|
|
Xiamen Shixin Little Sheep Catering Co., Ltd.
|
China
|
|
Xian Hepingmen Little Sheep Catering Co., Ltd
|
China
|
|
Xian Hezong Little Sheep Catering Co., Ltd.
|
China
|
|
XiNing Little Sheep Catering Co., Ltd
|
China
|
|
Xinjiang KFC Co., Ltd.
|
China
|
|
Xinxiang Hongqi Heping Little Sheep Catering Co., Ltd
|
China
|
|
YA Company One Pty. Ltd.
|
Australia
|
|
YCH S.a.r.l.
|
Luxembourg
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
YEB Holdings LLC
|
Delaware
|
|
YEB I LLC
|
Delaware
|
|
YEB II LLC
|
Delaware
|
|
YEB III LLC
|
Delaware
|
|
YIF US LLC
|
Delaware
|
|
Yinchuan Little Sheep Catering Company Limited
|
China
|
|
YRI Europe S.a.r.l.
|
Luxembourg
|
|
YRI Global Liquidity S.a.r.l. f/k/a Bolden Holding Sarl
|
Luxembourg
|
|
YRI Hong Kong II Limited
|
Hong Kong
|
|
YRI Hong Kong IV Limited
|
Hong Kong
|
|
YRI Investment Company S.a.r.l. f/k/a Brownstone Holdings Sarl
|
Luxembourg
|
|
Yum Restaurant Services Group, Inc
|
Delaware
|
|
Yum Restaurants Espana, S.L.
|
Spain
|
|
Yum Restaurants International (Proprietary) Limited
|
South Africa
|
|
Yum! Asia Franchise Pte Ltd
|
Singapore
|
|
Yum! Asia Holdings Pte. Ltd.
|
Singapore
|
|
Yum! Australia Equipment Pty. Ltd.
|
Australia
|
|
Yum! Brands Mexico Holdings II LLC
|
Delaware
|
|
YUM! Finance Holdings l Sarl f/k/a Sunhill Holdings Sarl
|
Luxembourg
|
|
Yum! Food (Hangzhou) Co., Ltd.
|
China
|
|
Yum! Food (Shanghai) Co., Ltd.
|
China
|
|
Yum! Franchise China IV S.à r.l.
|
Luxembourg
|
|
Yum! Franchise China Trust I S.à r.l.
|
Luxembourg
|
|
Yum! Franchise China Trust III S.à r.l.
|
Luxembourg
|
|
Yum! Franchise de Mexico, S. de R.L.
|
Mexico
|
|
Yum! Franchise II LLP
|
United Kingdom
|
|
Yum! Global Investments I B.V.
|
Netherlands
|
|
Yum! Global Investments II B.V.
|
Netherlands
|
|
Yum! Global Investments III, LLC
|
Delaware
|
|
Yum! International Finance Company S.a.r.l.
|
Luxembourg
|
|
Yum! International Participations LLC f/k/a Yum! International Participations S.a.r.l
|
Delaware
|
|
Yum! KFC Australia Holdings I LLC f/k/a Yum! Australia Holdings I LLC
|
Delaware
|
|
Yum! KFC Australia Holdings II LLC f/k/a Yum! Australia Holdings II LLC
|
Delaware
|
|
Yum! lll (UK) Limited
|
United Kingdom
|
|
Yum! Luxembourg Investments LLC f/k/a Yum! Luxembourg Investments S.a.r.l.
|
Delaware
|
|
Yum! Mexico, S. De. R. L. de CV
|
Mexico
|
|
Yum! Myanmar Holdings Pte. Ltd.
|
Singapore
|
|
Yum! PH Australia Holdings I LLC
|
Delaware
|
|
Yum! PH Australia Holdings II LLC
|
Delaware
|
|
Yum! Restaurant Holdings
|
United Kingdom
|
|
Yum! Restaurantes do Brasil Ltda.
|
Brazil
|
|
Yum! Restaurants (Chengdu) Co., Ltd.
|
China
|
|
State or Country of
|
|
Name of Subsidiary
|
Incorporation
|
|
|
|
|
Yum! Restaurants (China) Investment Co., Ltd.
|
China
|
|
Yum! Restaurants (Fuzhou) Co., Ltd.
|
China
|
|
Yum! Restaurants (Guangdong) Co., Ltd.
|
China
|
|
Yum! Restaurants (Hong Kong) Ltd.
|
Hong Kong
|
|
Yum! Restaurants (India) Private Limited
|
India
|
|
Yum! Restaurants (NZ) Ltd.
|
New Zealand
|
|
Yum! Restaurants (Shenyang) Co., Ltd.
|
China
|
|
Yum! Restaurants (Shenzhen) Co., Ltd.
|
China
|
|
Yum! Restaurants (Wuhan) Co., Ltd.
|
China
|
|
Yum! Restaurants (Xian) Co., Ltd.
|
China
|
|
Yum! Restaurants Asia Pte. Ltd.
|
Singapore
|
|
Yum! Restaurants Australia Pty Limited
|
Australia
|
|
Yum! Restaurants China Holdings Limited
|
Hong Kong
|
|
Yum! Restaurants Consulting (Shanghai) Co., Ltd.
|
China
|
|
Yum! Restaurants Europe Limited
|
United Kingdom
|
|
Yum! Restaurants Germany GmbH
|
Germany
|
|
Yum! Restaurants International (MENAPAK) Co. S.P.C.
|
Bahrain
|
|
Yum! Restaurants International (Thailand) Co., Ltd.
|
Thailand
|
|
Yum! Restaurants International Holdings, Ltd.
|
Delaware
|
|
Yum! Restaurants International Limited
|
United Kingdom
|
|
Yum! Restaurants International Ltd. & Co. Kommanditgesellschaft
|
Germany
|
|
Yum! Restaurants International Management LLC f/k/a Yum! Restaurants International Management S.a.r.l.
|
Delaware
|
|
Yum! Restaurants International Russia and CIS LLC
|
Russian Federation
|
|
Yum! Restaurants International Russia LLC
|
Russia Federation
|
|
Yum! Restaurants International S.a.r.l.
|
Luxembourg
|
|
Yum! Restaurants International Switzerland S.a.r.l.
|
Switzerland
|
|
Yum! Restaurants International, Inc.
|
Delaware
|
|
Yum! Restaurants International, S de RL de CV
|
Mexico
|
|
Yum! Restaurants KFC Australia Services Pty Ltd f/k/a Yum! Restaurants Australia Services Pty Ltd
|
Australia
|
|
Yum! Restaurants Limited
|
United Kingdom
|
|
Yum! Restaurants Marketing Private Limited
|
India
|
|
Yum! Restaurants New Zealand Services Pty. Ltd
|
Australia
|
|
Yum! Restaurants Spolka Z Ograniczona Odpowiedzialnoscia
|
Poland
|
|
Yumsop Pty Limited
|
Australia
|
|
Zhengzhou Hezong Little Sheep Catering Co., Ltd.
|
China
|
|
Zhengzhou Hongzhuan Little Sheep Catering Co., Ltd
|
China
|
|
Zhengzhou KFC Co., Ltd.
|
China
|
|
Zhongshan Little Sheep Catering Co., Ltd
|
China
|
1.
|
I have reviewed this report on Form 10-K of YUM! Brands, Inc.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report.
|
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
|
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
February 17, 2015
|
/s/ Greg Creed
|
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-K of YUM! Brands, Inc.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report.
|
|
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: February 17, 2015
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/s/ Patrick J. Grismer
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Chief Financial Officer
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1.
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the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 17, 2015
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/s/ Greg Creed
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Chief Executive Officer
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1.
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the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 17, 2015
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/s/ Patrick J. Grismer
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Chief Financial Officer
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