This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Yum! Brands Reports Second-Quarter EPS Growth Of 1%, Or $0.67 Per Share, Excluding Special Items; Projects Record International New-Unit Development For The Year; Reconfirms Full-Year 2012 EPS Growth Forecast Of At Least 12%

Yum! Brands, Inc., based in Louisville, Kentucky, is the world’s largest restaurant company in terms of system restaurants with nearly 38,000 restaurants in more than 120 countries and territories. Yum! is ranked #213 on the Fortune 500 List with revenues of more than $12 billion in 2011. The Company’s restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories. Outside the United States, the Yum! Brands system opened approximately four new restaurants each day of the year, making it a leader in international retail development.

 
 
 

YUM! Brands, Inc. Condensed Consolidated Summary of Results (amounts in millions, except per share amounts) (unaudited)

 
    Quarter     % Change     Year to Date     % Change
6/16/12     6/11/11 B/(W) 6/16/12     6/11/11 B/(W)
 
Company sales $ 2,762 $ 2,431 14 $ 5,106 $ 4,482 14
Franchise and license fees and income   406     385   6   805     759   6
Total revenues   3,168     2,816   12   5,911     5,241   13
 
Company restaurant expenses, net
Food and paper 916 792 (16) 1,683 1,454 (16)
Payroll and employee benefits 623 548 (14) 1,136 1,009 (13)
Occupancy and other operating expenses   800     705   (14)   1,424     1,273   (12)
Company restaurant expenses 2,339 2,045 (14) 4,243 3,736 (14)
 
General and administrative expenses 346 308 (12) 618 563 (10)
Franchise and license expenses 26 33 17 52 63 16
Closures and impairment (income) expenses 4 19 79 5 88 94
Refranchising (gain) loss (13 ) 5 NM (39 ) 3 NM
Other (income) expense   (7 )   (13 ) (44)   (86 )   (32 ) NM
Total costs and expenses, net   2,695     2,397   (12)   4,793     4,421   (8)
 
Operating Profit 473 419 13 1,118 820 36
Interest expense, net   38     35   (4)   75     78   6
Income before income taxes 435 384 14 1,043 742 41
Income tax provision   102     62   (64)   249     153   (63)
Net income - including noncontrolling interests 333 322 4 794 589 35
Net income - noncontrolling interests   2     6   78   5     9   49
Net income - YUM! Brands, Inc. $ 331   $ 316   5 $ 789   $ 580   36
 

Effective tax rate

  23.7 %   16.4 % (7.3 ppts.)   23.9 %   20.7 % (3.2 ppts.)
 

Effective tax rate before special items

  23.9 %   16.7 % (7.2 ppts.)   25.9 %   22.1 % (3.8 ppts.)
 

Basic EPS Data

EPS $ 0.71   $ 0.67   6 $ 1.70   $ 1.23   38
Average shares outstanding   465     471   1   465     472   1
 

Diluted EPS Data

EPS $ 0.69   $ 0.65   6 $ 1.65   $ 1.20   38
Average shares outstanding   477     484   1   478     485   1
 
Dividends declared per common share $ 0.285   $ 0.50   $ 0.57   $ 0.50  

See accompanying notes.

 

Percentages may not recompute due to rounding.

 
 

YUM! Brands, Inc. CHINA DIVISION Operating Results (amounts in millions) (unaudited)

 
    Quarter     % Change     Year to Date     % Change
6/16/12     6/11/11 B/(W) 6/16/12     6/11/11 B/(W)
 
Company sales $ 1,535 $ 1,164 32 $ 2,734 $ 2,057 33
Franchise and license fees and income   21     16   38   40     29   39
Total revenues   1,556     1,180   32   2,774     2,086   33
 
Company restaurant expenses, net
Food and paper 536 397 (35) 949 706 (34)
Payroll and employee benefits 293 191 (54) 481 314 (53)
Occupancy and other operating expenses   466     347   (35)   782     584   (34)
1,295 935 (39) 2,212 1,604 (38)
General and administrative expenses 81 67 (23) 129 104 (25)
Franchise and license expenses 2 1 NM 3 1 NM
Closures and impairment (income) expenses 2 3 29 3 3 4
Other (income) expense   (6 )   (8 ) (21)   (11 )   (23 ) (51)
  1,374     998   (38)   2,336     1,689   (38)
Operating Profit $ 182   $ 182   $ 438   $ 397   10
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 34.9 34.1 (0.8 ppts.) 34.7 34.3 (0.4 ppts.)
Payroll and employee benefits 19.1 16.4 (2.7 ppts.) 17.6 15.3 (2.3 ppts.)
Occupancy and other operating expenses   30.4     29.8   (0.6 ppts.)   28.6     28.4   (0.2 ppts.)
Restaurant margin   15.6 %   19.7 % (4.1 ppts.)   19.1 %   22.0 % (2.9 ppts.)
 
Operating margin   11.6 %   15.4 % (3.8 ppts.)   15.8 %   19.0 % (3.2 ppts.)
 

See accompanying notes.

 

Percentages may not recompute due to rounding.

 
 

YUM! Brands, Inc. YUM! RESTAURANTS INTERNATIONAL DIVISION Operating Results (amounts in millions) (unaudited)

 
    Quarter     % Change     Year to Date     % Change
6/16/12     6/11/11 B/(W) 6/16/12     6/16/11 B/(W)
 
Company sales $ 577 $ 549 5 $ 1,086 $ 1,016 7
Franchise and license fees and income   193     186   4   392     372   5
Total revenues   770     735   5   1,478     1,388   6
 
Company restaurant expenses, net
Food and paper 189 173 (10) 356 317 (13)
Payroll and employee benefits 145 142 (1) 275 263 (4)
Occupancy and other operating expenses   175     164   (6)   325     306   (6)
509 479 (6) 956 886 (8)
General and administrative expenses 102 91 (10) 184 167 (9)
Franchise and license expenses 11 12 7 21 22 3
Closures and impairment (income) expenses (1 ) 7 NM 9 95
Other (income) expense   (1 )     NM   (1 )     NM
  620     589   (5)   1,160     1,084   (7)
Operating Profit $ 150   $ 146   3 $ 318   $ 304   5
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 32.9 31.3 (1.6 ppts.) 32.8 31.1 (1.7 ppts.)
Payroll and employee benefits 25.1 26.0 0.9 ppts. 25.3 25.9 0.6 ppts.
Occupancy and other operating expenses   30.2     29.8   (0.4 ppts.)   29.9     30.1   0.2 ppts.
Restaurant margin   11.8 %   12.9 % (1.1 ppts.)   12.0 %   12.9 % (0.9 ppts.)
 
Operating margin   19.5 %   19.9 % (0.4 ppts.)   21.5 %   21.9 % (0.4 ppts.)
 

See accompanying notes.

 

Percentages may not recompute due to rounding.

 
 

YUM! Brands, Inc. UNITED STATES DIVISION Operating Results (amounts in millions) (unaudited)

 
    Quarter     % Change     Year to Date     % Change
6/16/12     6/11/11 B/(W) 6/16/12     6/11/11 B/(W)
 
Company sales $ 630 $ 703 (10) $ 1,252 $ 1,384 (10)
Franchise and license fees and income   188     180   4   366     352   4
Total revenues   818     883   (7)   1,618     1,736   (7)
 
Company restaurant expenses, net
Food and paper 182 216 16 364 421 14
Payroll and employee benefits 182 213 15 375 429 13
Occupancy and other operating expenses   156     191   18   313     379   17
520 620 16 1,052 1,229 14
General and administrative expenses 116 102 (13) 212 203 (4)
Franchise and license expenses 13 22 33 28 41 30
Closures and impairment (income) expenses 3 9 71 2 10 78
Other (income) expense       (2 ) NM       (2 ) NM
  652     751   13   1,294     1,481   13
Operating Profit $ 166   $ 132   26 $ 324   $ 255   27
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 28.9 30.8 1.9 ppts. 29.1 30.4 1.3 ppts.
Payroll and employee benefits 28.8 30.3 1.5 ppts. 29.9 31.0 1.1 ppts.
Occupancy and other operating expenses   24.8     27.2   2.4 ppts.   25.0     27.4   2.4 ppts.
  17.5 %   11.7 % 5.8 ppts.   16.0 %   11.2 % 4.8 ppts.
 
Operating margin   20.4 %   15.0 % 5.4 ppts.   20.1 %   14.8 % 5.3 ppts.
 

See accompanying notes.

 

Percentages may not recompute due to rounding.

 
 

YUM! Brands, Inc. Condensed Consolidated Balance Sheets (amounts in millions)

 
    (unaudited)    
6/16/12 12/31/11
ASSETS
Current Assets
Cash and cash equivalents $ 984 $ 1,198
Accounts and notes receivable, less allowance: $20 in 2012 and $22 in 2011 323 286
Inventories 305 273
Prepaid expenses and other current assets 390 338
Deferred income taxes 125 112
Advertising cooperative assets, restricted   104     114  
Total Current Assets 2,231 2,321
 

Property, plant and equipment, net of accumulated depreciation and amortization of $3,256 in 2012 and $3,225 in 2011

4,102 4,042
Goodwill 1,010 681
Intangible assets, net 733 299
Investments in unconsolidated affiliates 42 167
Restricted cash 300
Other assets 512 475
Deferred income taxes   547     549  
Total Assets $ 9,177   $ 8,834  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other current liabilities $ 1,770 $ 1,874
Income taxes payable 123 142
Short-term borrowings 316 320
Advertising cooperative liabilities   104     114  
Total Current Liabilities 2,313 2,450
 
Long-term debt 2,995 2,997
Other liabilities and deferred credits   1,597     1,471  
Total Liabilities   6,905     6,918  
 
Redeemable noncontrolling interest   45      
 
Shareholders' Equity
Common stock, no par value, 750 shares authorized; 458 shares and 460 shares issued in 2012 and 2011, respectively 18
Retained earnings 2,378 2,052
Accumulated other comprehensive income (loss)   (243 )   (247 )
Total Shareholders' Equity - YUM! Brands, Inc. 2,135 1,823
Noncontrolling interests   92     93  
Total Shareholders' Equity   2,227     1,916  
Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity $ 9,177   $ 8,834  
 

See accompanying notes.

 
 

YUM! Brands, Inc. Condensed Consolidated Statements of Cash Flows (amounts in millions) (unaudited)

 
    Year to Date
6/16/2012     6/11/2011
Cash Flows - Operating Activities
Net income - including noncontrolling interests $ 794 $ 589
Depreciation and amortization 279 269
Closures and impairment (income) expenses 5 88
Refranchising (gain) loss (39 ) 3
Contributions to defined benefit pension plans (43 ) (11 )
Gain upon acquisition of Little Sheep (74 )
Deferred income taxes (10 ) (48 )
Equity income from investments in unconsolidated affiliates (22 ) (27 )
Distributions of income received from unconsolidated affiliates 15 16
Excess tax benefit from share-based compensation (46 ) (22 )
Share-based compensation expense 23 26
Changes in accounts and notes receivable 16 9
Changes in inventories 14 20
Changes in prepaid expenses and other current assets (9 ) (23 )
Changes in accounts payable and other current liabilities (118 ) (71 )
Changes in income taxes payable 70 72
Other, net   69     33  
Net Cash Provided by Operating Activities   924     923  
 
Cash Flows - Investing Activities
Capital spending (406 ) (330 )
Proceeds from refranchising of restaurants 132 49
Acquisitions (542 ) (1 )
Changes in restricted cash 300 (300 )
Increase in short-term investments (82 )
Other, net   2     3  
Net Cash Used in Investing Activities   (596 )   (579 )
 
Cash Flows - Financing Activities
Repayments of long-term debt (15 ) (658 )
Revolving credit facilities, three months or less, net 350
Repurchase shares of Common Stock (289 ) (319 )
Excess tax benefit from share-based compensation 46 22
Employee stock option proceeds 22 22
Dividends paid on Common Stock (262 ) (234 )
Other, net   (41 )   (23 )
Net Cash Used in Financing Activities   (539 )   (840 )
Effect of Exchange Rate on Cash and Cash Equivalents   (3 )   25  
Net Increase (Decrease) in Cash and Cash Equivalents (214 ) (471 )
Cash and Cash Equivalents - Beginning of Year   1,198     1,426  
Cash and Cash Equivalents - End of Year $ 984   $ 955  
 

See accompanying notes.

 

Reconciliation of Non-GAAP Measurements to GAAP Results(amounts in millions, except per share amounts)(unaudited)

 

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements which present operating results in 2012 and 2011 on a basis before Special Items. Included in Special Items are the U.S. refranchising gain (loss), the gain on the acquisition of Little Sheep, impairment charges and deal costs associated with the planned refranchising of the Pizza Hut UK business and the losses and other costs relating to our decision to divest the Long John Silver’s ("LJS") and A&W All-American Food Restaurants ("A&W") brands. These amounts are described in (d), (e), (f) and (g) in the accompanying notes. Other Special Items include the depreciation reductions from KFC U.S. and Pizza Hut UK restaurants impaired upon our decision and/or offer to refranchise that remained Company stores for some or all of the periods presented, gains from sales of real estate related to our previously refranchised Mexico business and charges relating to U.S. General and Administrative ("G&A") productivity initiatives and realignment of resources.

4 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs