Pizza Hut 2004 Annual Report Download - page 59
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Please find page 59 of the 2004 Pizza Hut annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Theimpactoftheacquisition,includinginterestexpenseon
debtincurredtofinancetheacquisition,onnetincomeand
dilutedearningspersharewouldnothavebeensignificant
in2002.Theproformainformationisnotnecessarilyindica-
tiveoftheresultsofoperationshadtheacquisitionactually
occurredatthebeginningofthisperiod.
As of the date of acquisition, we recorded approxi-
mately$49millionofreserves(“exitliabilities”)relatedto
ourplanstoconsolidatecertainsupportfunctions,andexit
certainmarketsthroughstorerefranchisingsandclosures.
Theconsolidationofcertainsupportfunctionsincludedthe
terminationofapproximately100employees.Theremaining
exitliabilities,whichtotaledapproximately$17millionand
$27millionatDecember25,2004andDecember27,2003,
respectively,consistofreservesrelatedtotheleaseofthe
formerYGRheadquartersandcertainreservesassociated
withstorerefranchisingandclosures.Withtheexceptionof
theseremainingexitliabilities,thevastmajorityoftheother
reservesestablishedatthedateofacquisitionhavebeen
extinguishedthroughcashpayments.
ACCUMULATEDOTHER
COMPREHENSIVEINCOME(LOSS)
NOTE5
Accumulatedothercomprehensiveincome(loss)includes:
2004 2003
Foreigncurrencytranslationadjustment $ (34) $(107)
Minimumpensionliabilityadjustment,netoftax (95) (101)
Unrealizedlossesonderivativeinstruments,
netoftax (2) (2)
Totalaccumulatedothercomprehensiveloss $(131) $(210)
EARNINGSPERCOMMONSHARE(“EPS”)
NOTE6
2004 2003 2002
Netincome $ 740 $ 617 $ 583
BasicEPS:
Weighted-averagecommonshares
outstanding 291 293 296
BasicEPS $2.54 $2.10 $1.97
DilutedEPS:
Weighted-averagecommonshares
outstanding 291 293 296
Sharesassumedissuedonexercise
ofdilutiveshareequivalents 47 52 56
Sharesassumedpurchasedwith
proceedsofdilutiveshareequivalents (33) (39) (42)
Sharesapplicabletodilutedearnings 305 306 310
DilutedEPS $2.42 $2.02 $1.88
Unexercised employee stock options to purchase approxi-
mately 0.4million,4million and 1.4million shares ofour
Common Stock for the years ended December25, 2004,
December27,2003andDecember28,2002,respectively,
werenotincludedinthecomputationofdilutedEPSbecause
theirexercisepricesweregreaterthantheaveragemarket
priceofourCommonStockduringtheyear.
ITEMSAFFECTINGCOMPARABILITYOFNETINCOME
NOTE7
Facility Actions Facility actions consistsofthefollowing
components:
Refranchisingnet(gains)losses;
Storeclosurecosts;
Impairmentoflong-livedassetsforstoresweintendto
closeandstoresweintendtocontinuetouseinthebusi-
ness;
Impairment of goodwill and indefinite-lived intangible
assets.
2004 2003 2002
U.S.
Refranchisingnet(gains)losses(a)(b)$(14) $(20) $ (4)
Storeclosurecosts(c) (3) 1 8
Storeimpairmentcharges 17 10 15
SFAS142impairmentcharges(d) — 5 —
Facilityactions — (4) 19
International
Refranchisingnet(gains)losses(a)(d) 2 16 (15)
Storeclosurecosts — 5 7
Storeimpairmentcharges 24 19 16
SFAS142impairmentcharges(e) — — 5
Facilityactions 26 40 13
Worldwide
Refranchisingnet(gains)losses(a)(b)(d) (12) (4) (19)
Storeclosurecosts(c) (3) 6 15
Storeimpairmentcharges 41 29 31
SFAS142impairmentcharges(e) — 5 5
Facilityactions $ 26 $ 36 $ 32
(a)IncludesinitialfranchisefeesintheU.S.of$2millionin2004,$3millionin2003
and$1millionin2002andinInternationalof$8millionin2004,$2millionin
2003and$5millionin2002.SeeNote9.
(b)U.S.includesa$7millionwritedownin2004onrestaurantswecurrentlyownbut
haveofferedtosellatamountslowerthantheircarryingamounts.
(c)Incomeinstoreclosurecostsresultsprimarilyfromgainsfromthesaleofproper-
tiesonwhichweformerlyoperatedrestaurants.
(d)Internationalincludeswritedownsof$6millionand$16millionfortheyears
endedDecember25,2004andDecember27,2003,respectively,relatedtoour
PuertoRicobusiness,whichwassoldonOctober4,2004.
(e)In2003,werecordeda$5millionchargeintheU.S.relatedtotheimpairment
oftheA&Wtrademark/brand(seefurtherdiscussionatNote12).In2002,we
recordeda$5millionchargein Internationalrelatedtotheimpairmentofthe
goodwillofthePizzaHutFrancereportingunit.
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Yum!Brands,Inc.